XN000022-1992-02-16 — Page 2

1

SUNDAY, FEBRUARY 16, 1992

STUDY ON CHEMICAL PROCESSING INDUSTRY DEVELOPMENT COMPLETED

* * *

CONSULTANTS HAVE JUST COMPLETED A STUDY FOR THE INDUSTRY DEPARTMENT ON THE DEVELOPMENT POTENTIAL OF THE CHEMICAL PROCESSING INDUSTRY IN HONG KONG.

MANAGEMENT CONSULTANTS ERNST AND YOUNG, TOGETHER WITH ENVIRONMENTAL CONSULTANTS, ERL ASIA LIMITED HAVE RECOMMENDED THAT A SUITABLE SITE SHOULD BE TARGETED FOR DEVELOPMENT AS A CHEMICAL ESTATE WITH INFRASTRUCTURE APPROPRIATE TO THE HIGH-VALUE-ADDED CHEMICAL INDUSTRY AND THAT INVESTMENT IN AN INDEPENDENT BULK STORAGE FACILITY WAS A NECESSARY PART OF THIS INFRASTRUCTURE.

TAKING SUCH ACTION SHOULD OVERCOME THE FAILURE TO CONSIDER HONG KONG AS A FIRST CHOICE FOR LOCAL PRODUCTION OF HIGH-VALUE-ADDED CHEMICALS, THE CONSULTANTS ADDED.

THE CONSULTANTS EXAMINED A NUMBER OF SITES USING ENVIRONMENTAL AND DEVELOPMENT COST CRITERIA TO ARRIVE AT A RANKING OF ORDER OF

PRIORITY.

THE SITE OFFERING A COMBINATION OF THE LOWEST DEVELOPMENT COST AND LEAST ENVIRONMENTAL RISK WAS TSEUNG KWAN O AREA

137. THIS AREA, WHICH WILL REQUIRE RECLAMATION, IS LOCATED IMMEDIATELY TO THE SOUTH OF THE HONG KONG INDUSTRIAL ESTATES CORPORATION'S THIRD INDUSTRIAL ESTATE NEAR JUNK ISLAND IN TSEUNG KWAN 0.

OTHER SITES EXAMINED INCLUDE TUEN MUN AREA 38, THE THIRD

INDUSTRIAL ESTATE IN TSBUNG KWAN O, THE PROPOSED LAMMA BREAKWATER AP LEI PAI ISLAND IN ABERDEEN.

AND

A SPOKESMAN FOR THE INDUSTRY DEPARTMENT SAID THE STUDY FELL OUTSIDE THE USUAL SERIES OF TECHNO-ECONOMIC AND MARKET RESEARCH STUDIES COMMISSIONED BY

BY THE DEPARTMENT ON THE MAJOR GROUPS OF MANUFACTURING INDUSTRIES IN HONG KONG SUCH AS THE TEXTILES, GARMENTS, PLASTICS AND METALS INDUSTRIES.

THE SPOKESMAN EXPLAINED THAT THIS STUDY REQUIRED THE CONSULTANTS TO EXAMINE THE POTENTIAL FOR DEVELOPMENT OF AN INDUSTRY THAT HAD YET FORMED ONLY A SMALL PART OF THE MANUFACTURING SECTOR.

INVESTOR ENQUIRIES BOTH PRIOR TO THE START OF THE STUDY AND SINCE INDICATED THAT THERE COULD BE SOME POTENTIAL FOR GROWTH, PARTICULARLY TO SERVE THE RAPIDLY GROWING SOUTH CHINA MANUFACTURING REGION, THE SPOKESMAN SAID.

"GIVEN THE RELIANCE OF THE MANUFACTURING SECTOR ON IMPORTED CHEMICALS, THERE MAY BE THE POTENTIAL FOR GROWTH IN THE LOCAL CHEMICAL INDUSTRY, ESPECIALLY IN HIGH-VALUE-ADDED CHEMICALS THAT ARE INCREASINGLY USED IN THE MANUFACTURE OF HONG KONG'S HIGHER QUALITY EXPORTS.

"THE PURPOSE