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Germany-based Lanxess, a spin-off of chemical giant Bayer AG, aims to expand its brand new Weifang plant by as much as 20 per cent to meet surging domestic demand.

Lanxess top official yesterday said the expansion work could be completed in months.

Announcing the official opening of the joint venture works, able to produce 12,00 metric tons of hydrazine hydrate a year, at Weifang, in East China's Shandong Province, the German firm immediately unveiled expansion plans.

"We have plans to further expand capacity by as much as 20 per cent in months or quarters, to meet the growing demand in China," Axel Claus Heitmann, chairman of Lanxess's management board, told China Daily, on the sidelines of the opening ceremony.

Hydrazine hydrate is an intermediate material widely used in the agricultural, pharmaceutical, water treatment and plastics industries.

Heitmann said Lanxess has already completed designs for the further expansion, but he refused to reveal how much further investment the company planned for the plant.

The Weifang plant has been relocated from Lanxess' Baytown production facility in the United States.

Lanxess holds a majority 55 per cent share in the new works, with the remaining 45 per cent held by local firm Yaxing Chemical Co Ltd.

Although both domestic and foreign firms are vying to invest in China's petrochemical industries, Heitmann said he was not worried about over-capacity in the sector, thanks to China's robust growing market.

"Asia is Lanxess' priority market globally, and China is the fastest-growing chemical market with annual increase projected to maintain a double-digit rate incoming years," said Heitmann.

China needs around 30,000 tons for hydrazine hydrate a year, which means Lanxess' new plant in Weifang will be able to meet almost half the nation's demand.

Heitmann said the new plant will serve both the Chinese industry and plastic production transferred from other countries. "But the local market will take a dominant share."