(Yicai Global) Nov. 25 -- German chemicals giant BASF has begun construction of a USD10 billion factory, its biggest investment ever, in south China as it looks to accelerate its development in the world's second-largest economy.

The facility in Zhanjiang, Guangdong province, will be BASF's third-largest plant in the world and one of several of its smart Verbund sites dedicated to efficient production methods, the firm said in a statement on Nov. 23. Its biggest two are in Ludwigshafen, Germany, and Antwerp, Belgium.

"We are very excited about the fast progress," President of Asia Pacific Functions Dr. Stephan Kothrade told Yicai Global, adding that the company is progressing at "China speed."

BASF anticipates the new plant will meet rising demand from southern China customers in the high-speed rail, new-energy vehicle, electronics, footwear and consumer goods industries.

The first stage of the factory, which will make engineering plastics and thermoplastic polyurethane, should enter operations by 2022 and produce 60,000 metric tons of the materials a year, taking BASF's capacity in the APAC region to 290,000 tons per annum. The entire site should be open by 2030.

The plant is the first large-scale petro-chemicals project wholly owned by a foreign company in China and is a sure sign of the country's efforts to open up, added Ning Jizhe, deputy director of the National Development and Reform Commission, China's top economic planner.

Germany is China's largest trading partner in Europe and the new plant will be important for Germany as it looks to step up its efforts in economic, science and trade cooperation in the coming decades, said the country's Ambassador to China Dr. Clemens Von Goetz. He believes China can encourage more foreign investment by improving the local business environment and ensuring a free, fair market for overseas companies.

Editor: James Boynton