Dow Corning Zhang Kangming: Targeting New Energy to Add to China Market

“We are full of confidence in the Chinese economy and we will increase investment later,” said Zhang Kangming, president of Greater China of Dow Corning (China) Investment Co., Ltd., in an exclusive interview with the “China Business” reporter. When the financial crisis hit, the Chinese government’s 40,000 The billion-stimulus economic plan has given the market a stable growth environment, and the facts show that the economic growth after the Chinese economic stimulus plan has a good momentum.

"China Business News": As a foreign-funded enterprise, Dow Corning has developed rapidly in China in recent years, with a total investment of over one billion U.S. dollars. You have also said that the Chinese government’s four trillion stimulus plan has given the market a stable growth environment. But now, the Chinese government's regulation of the economy is becoming conservative. Do you feel that the market has changed?

Zhang Kangming: China's stimulus plan is large and efficient, which is recognized by the world. Facts have proved that the economic growth after China's economic stimulus plan has a good momentum. There have been some regulatory policies in the recent period. I think this is mainly because the Chinese government is adjusting economic growth.

Since the beginning of the economic stimulus plan was mainly in infrastructure, it has already formed a good momentum. Therefore, when domestic demand rises, the trend of conservative adjustments in infrastructure investment and fixed asset investment will not cause problems for economic development. Because the development of domestic demand will form a good alternative.

"China Business": Dow Corning has always been committed to sustainable development, so it is strategically focused on speed. While China’s economic growth has been relatively fast, of course, many of these issues will be hidden. If the investment speed is too slow, it will obviously lose a lot of market share; but if you increase the speed of investment, it is possible to face investment losses in the future economic adjustment, Dow Corning how to balance the relationship between the two?

Zhang Kangming: It can be said that the relationship between the two is very subtle. However, we are full of confidence in the Chinese economy and will continue to invest. For Dow Corning, China is still one of the strategic and vital overseas markets.

At present, our production base for silicone downstream products is also under construction. Products include sealants and silicone oils. With the establishment of Dow Corning's downstream production base in Zhangjiagang City, the production of our silicone rubber products will increase significantly, and the delivery time of customers in China and Asia will also be shortened, which greatly improves the efficiency of our customers. At the same time, it saves logistics costs.

At the same time, this year we have two landmark decisions in the Chinese market. One is the second phase of the construction of the largest silicone plant in Zhangjiagang, which is currently under construction. It is expected to be completed by the end of this year. After completion, the rated production capacity of silicone and fumed silica is expected to reach annual 200,000 metric tons will meet the growing market demand in China and even in Asia; the other is the establishment of the China Business Technology Center in Shanghai.

In addition to the improvement of the industrial chain, we have begun to focus on the development of new markets. China plays an important role in the use of thermoplastic elastomer components to manufacture important products such as automobiles, household appliances, sporting goods, power tools, etc. In this trend, China's thermoplastic elastomer market will continue to expand and diversify. development of. China has now become the largest and fastest-growing economy in the global thermoplastic elastomer market, and its main driving force for development is from the automotive industry. In this situation, we will work together with our custom thermoplastic solution provider, Ferris, to build a new production base in Zhangjiagang, China, to meet China's growing demand for innovative and customized thermoplastic solutions.

"China Business": What do you think about China's new energy industry plan?

Zhang Kangming: It can be said that China's sustainable development strategy has brought more opportunities and challenges to the company. The results of a study we conducted show that Chinese manufacturers will develop green products as the most important environmental protection measures. The important industries identified in China's “Eleventh Five-Year Plan” will have a lot to do, from infrastructure construction, to clean technology and clean energy, to healthcare, and silicone and silicon-based materials. The new energy and energy efficiency markets have become Dow Corning's new engine in China.

According to our understanding, China's "Emerging Energy Industry Development Plan" plans to achieve an installed capacity of solar power of 20 GW by 2020. However, because the technology at the starting point is still not very mature, how to achieve affordable Internet access has also become a bottleneck for China's solar energy development. Among these, there is a place where we can use it, and in the entire value chain of solar power generation, from the upstream silicon material We will actively participate in many aspects such as downstream construction and construction.

In my opinion, improving the product performance and production efficiency of the entire value chain from power generation equipment manufacturing to engineering construction is one of the feasible solutions to solve the problem of parity internet access.

The environment in which solar power plants are located is rather harsh. Therefore, the efficient operation of solar power plants, the corrosion resistance of power generation equipment and the entire system, and the long-term stability are extremely important. Through solar energy solutions, the performance and efficiency of solar power stations in the solar power value chain can be improved, which can further reduce the cost of power generation and help achieve parity Internet access.

"China Business": You have worked in Seoul for five years. In your opinion, can you compare the Korean government and the Chinese government to who is more positive about the new energy industry?

Zhang Kangming: It is sustainable development. Sustainability is the biggest opportunity for Dow Corning itself, China, and the world. The results of a study we conducted show that Chinese manufacturers will develop green products as the most important environmental protection measures. In addition, the Chinese government has listed energy conservation and environmental protection as the focus of the 11th Five-Year Plan. Therefore, it is our greatest opportunity to produce more energy-efficient and more efficient products to achieve the goal of sustainable development.

Our company has great potential in this area. For example, in the process of new energy development in China, according to our understanding, the Chinese government has a goal that the installed capacity of solar power can reach 20 GW by 2020, and the starting point is still relatively low. Because the technology is not yet mature, we will be able to make great contributions to the development of new energy in China in the course of achieving our goals in 2020. We will continue to maintain the leading technology in the solar market and will actively pursue other aspects. Participation, such as providing a variety of energy-efficient products and solutions, applied in many aspects such as insulation glass, solar panels, wind turbines and light-emitting diodes and industrial lighting devices.

China Business Daily: In terms of solar power generation, Dow Corning proposed a material solution to help achieve solar energy parity online. How to achieve parity Internet access is also a bottleneck in the development of China's solar energy. Where can we further reduce the cost of power generation?

Zhang Kangming: From the perspective of solar energy, we have participated in many aspects of the entire value chain of solar power generation. In the field of compound semiconductors, we have a joint venture company to provide some materials for solar energy semiconductors, as well as construction and other aspects. We all participate in the process. From this perspective, many aspects can be improved through our technology.

The most important thing in this industry is still the cost of power generation. If the price is competitive enough, solar power can be developed relatively quickly. Once a solar power station is installed and can operate efficiently, it should be possible to continue to use solar energy for many years to generate electricity. The solar power stations are generally exposed to harsh environments, and the sun's exposure to wind and rain must withstand the harsh environment. The requirements for power stations and related equipment are also very high. This requires that the materials used must not be degraded over time and can withstand the tests of corrosion resistance and all kinds of bad weather. The materials we provide can remain relatively stable under harsh conditions for a long period of time. Therefore, we believe that we will increase the performance of solar power plants throughout the entire solar energy value chain, maintain long-term stability, and in essence improve the operation of solar power plants. effectiveness.

In addition, if we want to achieve the target of 20 GW installed capacity by 2020, there will be high requirements for the total amount and quality of solar power related equipment. From the perspective of solar power equipment manufacturing processes, our processes, technologies and solutions can also improve efficiency and ensure quality.

Although we are involved in all the value chains of solar power generation, our goal is to enable solar power generation costs to compete with other energy sources and make this new type of environmentally friendly energy stand out.

"China Business": Dow Corning chose to build a factory in Zhangjiagang. Is it because of the lower salary costs? Now that Chinese companies are facing a wave of salary increases, does Dow Corning consider this?

Zhang Kangming: To choose Zhangjiagang to build a factory, one aspect is that from a logistics point of view, Zhangjiagang's unique geographical location facilitates the import of raw materials and the shipment of finished products. Secondly, the Zhangjiagang municipal government supports this project very much and provides long-term cooperation. A lot of guidance led us to solve a lot of practical problems.

Our standards for building factories are safety, quality, reliability and cost, so we hope to attract the best talents. From the perspective of Dow Corning, we also hope to provide employees with a comfortable working and living environment. From this perspective, We will attract the best people while meeting their work and life needs so that they are willing to stay at Dow Corning. This is what we have been doing and we have done very well. The entire work process of Dow Corning employees is very fulfilling. We are very confident that we are willing to make adjustments to our work and make contributions to the company.

We are rated as the best employer in China by a body called CIF.

“China Business”: Dow Corning chose WACKER, the largest competitor, to set up a joint venture instead of selecting a Chinese company. What is the reason for this? Can you tell us the story behind?

Zhang Kangming: Dow Corning and WACKER Chemical Co., Ltd. jointly invested approximately US$1.8 billion to build China's largest integrated organic silicon production base in Yangzijiang International Chemical Industrial Park, Zhangjiagang City. The site covers an area of ​​approximately one million square meters, including two silicone upstream production facilities operated jointly by Dow Corning and WACKER: Siloxane and fumed silica plants, and the two companies are operating independently Silicone downstream production plants for marketing and sales. The first phase of the silicone plant and fumed silica plant was officially put into operation in mid-November 2008. The entire project is expected to reach full production capacity by the end of 2010, with an annual output of about 200,000 tons of silicone and fumed silica.

The cooperation with WACKER can be traced back many years ago. Our agreement was signed in 2004. Before negotiating for many years, WACKER cooperation was chosen because the two companies found a good meeting point. Dow Corning hopes to meet the demand for organic silicon materials in the fast-growing Chinese and Asian markets through the Zhangjiagang integrated production base.