(Yicai Global) Nov. 19 -- Wanhua Chemical will build a factory in the US to avoid tariff hikes caused by the escalating trade tensions between China and the US.
Wanhua Chemical will construct a plant to make methylene diphenyl diisocyanate in Convent in Louisiana to promote its products in the North American market, the Shandong province-based firm said in a statement.
The investment will amount to USD1.3 billion and the factory will have a production capability of 400,000 tons of MDI each year. MDI is used for making polyurethane foam and synthetic fibers.
The US government has imposed a 10 percent tax increase on Wanhua's MDI products, the statement said, adding that the US plant will resolve the risks caused by this issue. Some Chinese home appliance firms, such as KingClean Electric, Gree Electric Appliances, and Changhong Electric, have also started looking into building overseas plants to avoid such additional levies, which have emerged from US President Donald Trump's Section 301 to protect his country's domestic players.
During the construction, the firm will create 1,000 jobs locally. After completion, it will hire 170 employees directly and over 1,000 workers indirectly.
Editor: Emmi Laine