Zhanjiang's investment boom takes off

Eight projects related to the giant iron and steel complex on Donghai Island in Zhanjiang, Guangdong province, launched recently, with 42 more expected to follow from this month.

The 1.729 billion yuan ($282.56 million) from the eight projects is just part of the huge investment boost received by the port city of Zhanjiang for the construction of mammoth steel and petrochemical projects.

The first blast furnace of the steel plant on Donghai Island, owned by the country's leading steel maker Baosteel Group, is scheduled to go into operation in September next year, said mayor Wang Zhongbing.

When complete the facility will have an annual capacity of 9.2 million tons of iron and 10 million tons of steel. It will focus on the South China and Southeast Asia markets in industries including automobiles, home appliances, construction, shipbuilding and machinery.

The petrochemical joint venture between Sinopec and Kuwait Petroleum Corp will include a refinery to process 15 million tons of crude oil a year and an ethylene facility with an annual output of 800,000 tons. Operation of the refinery is due to start in 2016 and the ethylene plant will go online in 2017.

The facility is the largest Sinoforeign petrochemical project to be built on the Chinese mainland. The first phase of Guangdong Guanhao High-Tech Co's 7.6 billon yuan paper plant went into trial operation on Donghai Island in June.

China Paper Corp and Chenming Group also have massive paper-making projects in Zhanjiang.

The city government plans to create a 50 square kilometer petrochemical industrial park and a 30 sq km steel industry clustering park in Zhanjiang Economic and Technological Development Zone, which includes Donghai Island, Wang said.

Apart from the sectors along the industrial chains of the two mega projects, sectors expected to receive a boost also include port logistics, financial services, commerce and real estate.

The gross domestic product of the city, which is in the less developed western part of Guangdong, is expected to double from last year to hit 400 billion yuan in 2017 and grow further to 600 billion yuan in 2020. The government aims to achieve 12 percent GDP growth and 25 percent increase in fixed-asset investment this year.

To facilitate investment, the government has focused on upgrading the transport network, with more highways and roads being built, Wang said.

As part of this, a relocated airport is expected to open in 2017. The construction of the remaining Shenzhen-Maoming section of the high-speed railway linking Shenzhen in the Pearl River Delta and Zhanjiang started in June.

It is expected to be completed in 2017 and will reduce traveling time between the two cities to two hours.

The construction of the high-speed railway between Zhanjiang and Hepu county in the Guangxi Zhuang autonomous region is expected to start later this year. The cargo throughput at Zhanjiang port stood at 180 million tons last year and is expected to hit 300 million tons in 2016. The port handled 387,000 twenty foot equivalent units in the first nine months of this year, more than the total volume last year.

The major projects in the city are expected to help the port reclaim its ranking as one of the country's top 10 ports. Zhanjiang's 2023.6-km coastline and ocean area of more than 20,000 sq km means it has natural berths deep enough to carry 300,000-ton vessels and plans are in place to raise the capacity to 400,000 tons.

The steel and petrochemical projects are estimated to create hundreds of thousands of jobs when they go into full swing, Wang said.

In July, more than 664 people, including farmers living on Donghai Island, were recruited for a training scheme, which included a trip to Baosteel's headquarters in Shanghai, to work at the new steel complex.

Zhanjiang, which has a population of about 8 million, is expected to achieve an urbanization rate of 60 percent in the coming decade from the current less than 40 percent.

The central urban area of the city will double to 300 square kilometers by 2020.