Samsung SDI plans 2 Shaanxi plants

South Korea's Samsung SDI Co Ltd plans to build two new facilities in Xi'an, capital of northwest Shaanxi province, to produce an electronic car battery and semiconductor package, the provincial governor has revealed.

Lou Qinjian, governor of Shaanxi and a national legislator, made remarks at a news conference on Friday on the sidelines of the ongoing two sessions of NPC and CPPCC.

The two parties have already signed a preliminary agreement on the battery, on which Samsung would cooperate with two Chinese companies, the ARN Group and Xi'an High-Technology Group.

Some $6 million will be invested into the project within five years.

And the construction of the new plant is expected to start within the year and become operational in 2015, according to Lou.

He said the new pair of projects were planned due to a smooth and fast construction of a previous Samsung facility known as NAND flash plant.

That plant, involving a $7 billion investment, was launched in April 2012 and started full operation on Dec 27 last year with a monthly output of 100,000 chips and annual sales of more than 60 billion yuan ($9.8 billion).

"That's dubbed by many including the media as 'Shaanxi speed', which is not common even around the world," Lou noted.

Samsung SDI plans 2 Shaanxi plants

"That could hardly (be realized) without a good investment environment in the province," he stressed.

In addition, Samsung inaugurated two research institutes, one on big data analysis and the other on software research and development, in Xi'an last year.

"Such investments from overseas, in fact, have prompted the province to keep enhancing the operation environment," he said.

Meanwhile, he conceded that Shaanxi still lags behind other areas in China, which opened up earlier in terms of luring and facilitating investments inbound.

But "we are trying to change and catch up", he said.

As the geographical center of China, Shaanxi plays an important role in China's opening-up, he added.

Last year, Johnson & Johnson, the healthcare company based in the United States, moved to locate its regional headquarters to Xi'an.

Moreover, high-tech companies like ZTE and Huawei have expanded the scale of their research centers in the city, he added.

Xi'an Mayor Dong Jun said projects such as Samsung's would help the city with huge development of its IT industry, which is expected to be worth 300 billion yuan by 2015, he added.

In another major development, Dong said that Xi'an has applied to become a free trade zone in the context of the Silk Road economic belt development plan.

President Xi Jinping made the proposal of the Silk Road economic belt to enhance cooperation and economic ties among European and Asian countries during a visit to Kazakhstan in September.

The Silk Road was originally known as the land trade route opened more than 2,000 years ago. It began at Xi'an and ran through northwest Gansu province and the Xinjiang Uygur autonomous region, and Central and Western Asia, to finally reach the Mediterranean.

"Xi'an needs to seize the unprecedented opportunity for future development," Dong noted.

He referred to its unique geographic location, rich scientific research resources, and dominant industries supplementary to other cities along the route as major advantages of Xi'an to be a free trade zone.

But some experts pointed out that more specific policies and methods for trade and investment should be introduced to facilitate the plan.