China's Organosilicon Industry Develops Fast but Is Still Fragile   

By Fu Jilai, former president of Chenguang Research Institute of Chemical Industry

In recent years, China's organosilicon industry has achieved remarkable progress. In 2010, the methyl chlorosilane (MCS) monomer capacity of domestic enterprises totaled 1.7 million t/a, and output reached 850 000 tons. However, the development of the industry is faced with many problems. The capacity of upstream primary product is serious overcapacity, but the downstream product chain is very weak and scattered. At the same time, Dow Corning, Wacker and other multinational giants are stepping up the production and sales of organosilicon products in China. Relying on their strength in technology and product quality, they have completed the "localization" layout in China ... Faced with such a grim situation, domestic enterprises need policy supports and enhance their international competitiveness to survive the cruel competition.

1 China's organosilicon industry has made remarkable achievements

In 1951, Chinese scientists began to study organic silicon materials. Till now, the Chinese organosilicon industry has gone through six decades. In the past 60 years, after the hard work of several generations of Chinese scientists, engineers and workers, China's organosilicon industry has grown from scratch into today's scale. Its progress and achievements are conspicuous. Up to now, many research institutes and universities in China are engaged in the study of organic silicon, walking in the forefront of advanced organosilicon technology, and becoming a pillar force for the further development of China's organosilicon science and industry.
   The output of methyl chlorosilane (MCS) monomer is one of important indexes to measure the development level of a country's organosilicon industry. In 2009, China's total production capacity of MCS reached 980 000 t/a, and its actual output of MCS was 565 000 tons. In 2010, the capacity reached 1.7 million t/a, and the output was 850 000 tons. Among fifteen domestic MCS producers, more than ten are private enterprises, whose combined output of MCS accounts for about half of the national total.
   Currently, there are numerous enterprises in downstream organosilicon areas in China. They can produce silicone rubber, silicone oil, silicone resin, silane coupling agents and other types of products. Most of them are private enterprises. It was reported that the domestic consumption of downstream organic silicon products in China reached more than 400 000 tons in 2009 and more than 1.15 million tons in 2010.

2 Problems faced with domestic organosilicon enterprises

There are more than ten domestically-funded producers of organic silicon monomers in China, but they are all small-sized, mostly having a fluidized bed MCS capacity of 60 000 t/a. No single plants have a capacity of more than 100 000 t/a. Comprehensive plants that can produce both a wide range of upstream and downstream organosilicon products are very rare. Some enterprises can only produce MCS and completely cannot produce downstream products, so they cannot digest their own MCS monomers, but can only sell cyclosiloxanes, which are of primary form and now have low profit margins. In the current market downturn, they are particularly passive and fragile. There are a large number of downstream enterprises, but they are mostly small-sized, having similar products, and having no product trees or product chains. Therefore, on the whole, China's organosilicon industry has an irrational product structure and is in an unhealthy development state.
   The overcapacity of primary products has been serious in China. In 2010, China's MCS capacity already reached 1.7 million t/a. But many local governments and enterprises are still ambitiously building new MCS projects or expanding existing ones. Currently, several enterprises plan to expand their existing MCS plants. Some places plan to build new large-scale MCS projects. For example, at a place in Inner Mongolia, three new MCS projects recently started construction, with a combined capacity of 800 000 t/a. If these projects can all be implemented, the total MCS capacity of domestically-funded enterprises will greatly exceed the current global total.

3 Major domestic organosilicon enterprises

(1) Jiangxi Starfire Chemicals Co Ltd

The company was founded in 1968 and was formerly known as Starfire Chemical Plant. It is a large producer of military chemicals and new chemical materials and is a subsidiary of China National Bluestar Group. Now, it has an organosilicon monomer capacity of 200 000 t/a. It is China's largest organosilicon manufacturer and one of the world's top four organosilicon producers. Some of its products have been exported to Europe, Southeast Asia, Japan, South Korea and other countries and regions. The company has formed a complete silicone-oriented production system.
   In 2010, the company expanded its organosilicon production capacity from 200 000 t/a to 300 000 t/a; and its organosilicon output reached 165 000 tons.
   In addition, the company introduced French BSI advanced production technology to build a large-scale organosilicon project in August 2009, including a 400 000 t/a organosilicon monomer unit and a 240 000 t/a downstream silicone product unit. After the project is completed in 2015, the company's production capacity of organosilicon monomers will reach 700 000 t/a. By then, the company will become the world's largest organic silicon production base.

(2) Zhejiang Wynca Chemical Group Co Ltd

The company was founded in 1965 and was listed into Shanghai Stock Exchange in September 2001. It is one of the world's largest producers of glyphosate. By making use of its advantage in methyl chloride, which is a byproduct of glyphosate, the company has already built a 100 000 t/a MCS plant and a 20 000 t/a silicone rubber plant. In 2010, the company and Momentive jointly built a 50 000 t/a siloxane plant. On April 27, 2011, the company and Momentive announced to expand their joint venture's siloxane capacity to 150 000 t/a, with each having an additional investment of US$33.15 million and US$31.85 million, respectively. The expansion project is expected to put into production in 2013.

(3) Zhejiang Hesheng Silicon Industry Co Ltd

The company is a Sino-foreign joint venture and was established in August 2005. It covers an area of 26.7 hectares and has a total investment of US$ 99.87 million and a registered capital of US$60 million. The company has more than 350 employees, of whom more than 100 are middle and senior professionals and technicians. It is a modern chemical enterprise integrating research and development, production and sales of chemicals. The first-phase 60 000 t/a organosilicon mixed monomer project was put into operation in 2007. In July 2009, the expansion and transformation of its organosilicon monomer unit was successfully completed and smoothly put into production. In 2010, its new 80 000 t/a organosilicon monomer unit was put into production, and the company established silicon metal and silicone production bases in several places.
    In 2010, the company had an organosilicon monomer production capacity of 160 000 t/a and an annual organosilicon monomer output of 85 000 tons.

(4) Shandong Dongyue Group

The company is Asia's largest fluorine & silicon material production base. In 2006, the company entered the organosilicon industry. Its 60 000 t/a organosilicon unit was put into operation in 2008. In 2010, its new 100 000 t/a organosilicon unit was put into production. Through the combination of fluorine and silicon industries, the company is likely to become North China's largest silicone produce