BEIJING, June 1 -- Dow Chemical Co said yesterday it will invest US$200 million to expand petrochemical production at its facility in Zhangjiagang, Jiangsu Province.

    "We've already invested US$300 million in Zhangjiagang, which has become Dow's major manufacturing site in China and in the Asia Pacific region," said Frankie Ko, vice president of business development at Dow China.

    The new investment will be used to build two new plants and expand an existing factory for downstream products including glycol ethers in Zhangjiagang, a port city 125 miles upstream from Shanghai along the Yangtze River.

    "I hope, though I cannot guarantee, that the three projects can be operational in 2008," Ko said. "If demand increases, surely we will continue to seek additional investment here in China."

    Meanwhile, Ko would not confirm or deny a recent Reuters report that Dow is involved in a US$5 billion joint venture refinery project in China with PetroChina Co and Kuwait Petroleum Corp.

    "We do have interests in the upstream petrochemical sectors like ethylene production," he said. "But I have no concrete plans to share with you now."

    Dow is also cooperating with Shenhua Group Corp, China's biggest coal producer, in evaluating the feasibility of a large-scale coal-to-olefins project in Shaanxi Province. Olefins are hydrocarbons such as ethylene, a source for many compounds.

    Michigan-based Dow has invested US$500 million so far in China and last year recorded US$2.3 billion in sales in the country, or about 5 percent of its global total.

    China is now Dow's third-biggest market behind its home turf and Germany.

    Andrew N. Liveris, Dow's president and CEO, said earlier that he hopes China will surpass Germany in a decade and become the biggest market in 20 to 30 years.