A Dow Corning booth at an industry exhibition in Shanghai. [Photo / China Daily]

ZHANGJIAGANG, Jiangsu - China's largest silicone production base became operational in Zhangjiagang on Thursday to serve fast-growing demand for the material in the country and throughout Asia.

The integrated manufacturing site, operated by Dow Corning Corp of the United States and Germany's Wacker Chemie AG, involves a total investment of $1.8 billion and includes a siloxane plant and a pyrogenic silica plant.

Siloxane and pyrogenic silica are key ingredients in the manufacture of finished silicone products. Silicone-based materials are used in nearly all sectors of China's economy, including automobiles, construction, electronics, power generation and distribution, solar energy, cosmetics and personal care products, and textiles.

The Zhangjiagang joint facility is Dow Corning's third pillar after manufacturing sites in the United States and the United Kingdom, and will serve Asia-based customers, said Stephanie Burns, chairman of Dow Corning Corp.

China is now the second-largest silicon market and will soon become the largest, Burns said.

The total annual output of the production base is expected to reach 210,000 tons.

"We are ramping up production over the next six to 18 months and the facility will be at maximum operation," said Dow Corning President Robert Hansen.

China represents over 50 percent of Dow Corning's global sales and has been experiencing a double-digit growth rate, according to the company.

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For Wacker, one-third of its sales are generated from Asia where China accounts for 60 percent of revenue. Its sales in China reached 730 million euros ($996 million) last year, representing 20 percent of its global sales.

Wacker also announced its plan to invest a total of 400 million euros in China by 2013.

Burns predicted that high-tech industries, including advanced construction, such as green buildings, electronics, automobiles and renewable energy would be the growth points for silicone products.

"We will work closely with local car producers who are gaining more momentum as China becomes the world's largest automobile market," said Jeremy Burks, president of Dow Corning in China.

Despite global economic woes, the polysilicon business has continued to grow thanks to the development of the solar energy sector, according to the two companies.

Dow Corning said it currently has no plan to build a manufacturing site in China, which will center on providing the material for the booming solar industry. Dow Corning said it is now investing $5 billion in the US, Europe and some parts of Asia to develop its solar-related business.