The facility will initially produce products like resins, polymers and specialty additives used in coatings for paint, wood, plastic, metal and textiles. Later, it could also make ingredients for personal care products.

"The US$40 million project is the single largest project that Lubrizol has undertaken anywhere in the world, at least in the last decade," Senior Vice President and Chief Financial Officer Charles P. Cooley said in Shanghai.

The facility will be built on 31,000 square meters of recently acquired land adjacent to the company's existing plant in the city's Songjiang District. Production is set to start in the third quarter this year and be completed in the fourth quarter of 2008.

The existing facility produces thermoplastic polyurethane, or TPU, a plastic that can be softened by applying heat, reshaped and welded.

Total production capacity for the Songjiang facilities, including the TPU plant, could be between 26,000 tons and 30,000 tons per year when the new plant starts production in 2009, said Joseph Chai, vice president of Lubrizol China.

(For more biz stories, please visit Industry Updates)