Wuxi Resin Factory held technical cooperation talks with Japan’s Tohto Kasei between 1982 and 1985, yet no formal contract was reached. In December 1985, it switched partners and signed an agreement with Germany’s RHE to import a 3,000 tons per annum electronic-grade epoxy resin production line. Trial run of the facility was completed in November 1990.
Yueyang Petrochemical (later renamed Baling Petrochemical) sealed a cooperation contract with Tohto Kasei in 1985, introducing a 3,000 tons per annum high-purity epoxy resin unit. The plant was officially put into production in March 1988, marking China’s first advanced epoxy resin production facility of its kind.
As a central state-owned enterprise directly under Sinopec, Yueyang Petrochemical enjoyed higher authority over project approval, foreign exchange allocation and administrative review. It could communicate directly with national ministries and senior management of the Japanese partner, enabling swift negotiation and deal finalization.
By contrast, Wuxi Resin Factory belonged to municipal local state-owned assets. Its project applications had to pass multi-level reviews at municipal and provincial authorities, leading to prolonged timelines for foreign exchange quota approval and project initiation. In the early 1980s, the factory prioritized optimizing domestic legacy production processes and showed less urgency to introduce foreign advanced technologies.
During negotiations, Wuxi faced persistent disagreements over technical standards and pricing. Tohto Kasei demanded high licensing fees and strict technical confidentiality clauses which the Chinese side could not accept. Meanwhile, Wuxi simultaneously contacted multiple suppliers from Germany and Japan, dispersing its negotiation focus.
Yueyang Petrochemical solely concentrated on Tohto Kasei with a clear development target: high-purity epoxy resins for electronics and high-end coating applications. From Tohto Kasei’s perspective, cooperating with a central integrated refining and chemical base represented a far more stable long-term partnership with broader market coverage, so the Japanese side prioritized signing a contract with Yueyang.
Yueyang established its petrochemical base back in 1969, with self-sufficient production capacity for caustic soda, epichlorohydrin and sulfuric-process bisphenol A. After importing the epoxy resin technology, the site rapidly formed a closed industrial chain spanning caustic soda, organochlorine products and epoxy resins, cutting manufacturing costs and shortening trial operation cycles significantly.
Wuxi lacked self-produced raw material supplies and had to source all bisphenol A externally. The outsourced sulfuric-process bisphenol A suffered inconsistent quality. The factory only imported Polish ion-process bisphenol A technology after 1988, with the supporting unit not commissioned until 1995. Restricted raw material supply dragged down the whole epoxy resin project schedule.
Towards the later stage of talks with Tohto Kasei, technical disputes intensified. The Japanese party only offered low-end manufacturing techniques while imposing costly barriers on high-end technology transfer. Wuxi then conducted field inspections of Germany’s RHE, whose electronic-grade epoxy resin technology featured more open licensing and better alignment with Wuxi’s local electronics manufacturing cluster. The factory ultimately signed with the German firm at the end of 1985, abandoning the Japanese technical route entirely.
Yueyang Petrochemical’s epoxy resin plant launched in 1988 quickly captured the domestic high-end market, emerging as China’s technological benchmark and largest producer of epoxy resins. The enterprise later carried out continuous capacity expansion and achieved independent technological breakthroughs through in-house R&D.
Wuxi Resin Factory’s facility started trial production in 1990 and filled the domestic gap in electronic-grade epoxy resins. However, the high-end market space had already been occupied by Yueyang Petrochemical. Throughout the 1990s, Wuxi narrowed its competitive gap via joint ventures with DIC (Dainippon Ink and Chemicals).
Backed by central enterprise administrative privileges, a fully integrated raw material supply chain and focused, efficient negotiations with its Japanese partner, Yueyang Petrochemical constructed China’s first domestically operated Japanese high-purity epoxy resin plant. Constrained by local bureaucratic procedures, insufficient self-supply of key feedstocks and a last-minute switch to German technology, Wuxi Resin Factory engaged foreign suppliers earlier but delivered its project much later.
