Owens Corning Corp (OC), the world's leading producer of fiberglass reinforcements, began operating a new $100 million facility in Yuhang, Zhejiang province, on Wednesday.

The new manufacturing base will produce single-end rovings (reinforcement for fiberglass products) for the Chinese market.

The facility, scheduled to have an annual production capacity of 80,000 tons, is the first phase in the company's three-phase project and will cost $253 million, according to the Yuhang district government.

"However, the total investment might be more than that," said Sang Kyoo Han, vice-president and managing director of OC's Asia-Pacific Composite Solutions business.

"We have left enough land for further expansion, but we have no timetable at the moment for a launch of the second and third phases. It depends on the market demand," said OC's Chairman and Chief Executive Officer Michael Thaman.

The plant represents a milestone in the company's 73-year history and demonstrates OC's strong commitment to the Chinese market, Thaman said.

The new facility will augment output from an existing facility in the town of Banshan, near Hangzhou, the capital city of Zhejiang province, to meet the growing demand for composite solutions.

He said the products from the new facility will serve the market in China as well as the Asia-Pacific region and replace imports from Europe and the United States.

At present, OC's composite solutions business operates eight plants in Asia, including those in Beijing, and Changzhou in Jiangsu province. The company also has facilities in Taloja in India, Ibaraki in Japan and Kimchon in South Korea.

"Building such a new facility in China is part of our global business strategy to supply our customers locally, and to show our commitment to serving the fast-growing China market," Thaman said.

Insiders said that although China is a large potential market for composite solutions, it has also become the world's largest producer of fiberglass because of the development of its industries such as automobiles, building materials, wind energy, power and high-speed trains.

The nation now has an annual fiberglass production capacity of approximately 2.7 million tons, which accounts for more than half of the global output, with 25 percent exported. However, compared with the per capita consumption of 4.5 kilograms of fiberglass in the United States and Japan, China consumes only 0.6 kilograms per capita, leaving room for market expansion, they said.

The new plant in Yuhang is designed to be energy efficient, combining OC's patented Advantex glass formula with advanced glass-melting technology.