BP has launched a $300 million joint venture in China to produce purified terephthalic acid (PTA) in the southern city of Zhuhai, reports the official journal China Daily.

PTA, which is usually produced using a palladium catalyst, is the favoured raw material in the making of the polythylene terephthalate polymer. This is used in the manufacturing of goods such as textiles, packaging and film products.

The venture is part of a BP plan to invest three billion dollars in the country over the next five years, which the paper announced today, quoting Byron Grote, who is the company's chief financial officer.

BP has an 85 per cent stake in the project, known as BP Zhuhai Chemical Ltd, with the remaining 15 per cent owned by the Fu Hua Group, a local company.

Initial production of PTA is expected to run at 350,000 tonnes a year, which the paper predicts will increase to 500,000 'in the near future'.

The company will aid Chinese polyester companies by reducing their reliance on imports. Official statistics reveal that of the 6.6 million tonnes of PTA consumed in 2002, just 30 per cent was supplied by domestic manufacturers.