Supported by favorable policies such as tax cuts and new land use rights offered by the Chengdu government, as well as qualified local university graduates, Bluestar Chengrand has begun research on the project's second phase. It plans to invest about 3 billion yuan ($486 million) in Chengdu to establish a production line for para-aramid and equipment to manufacture composite materials.

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The expansion, with operations expected to start in 2015, will make the company the third-largest producer of para-aramid in the world after Wilmington, Delaware-based E. I. du Pont de Nemours & Co and Japan's Teijin Ltd, Wang Fengde, vice-director of Bluestar Chengrand, said.

"Para-aramid fiber is used in the production of components for automobiles, airplanes and high-speed trains, of which western China produces a lot," Wang said. "We will keep investing 10-15 percent of our annual sales into research and development every year, and we'll also consider adding several new research labs and a department in Chengdu."

The Chengdu-based company has received a high volume of orders and inquiries for the use of various new materials from traditional domestic factories in recent years, Wang said. They are interested in upgrading the technical content of their products. Interest has come from shipyards, garment factories, shoe manufacturers and tire producers in the Pearl River Delta, Yangtze River Delta and the Bohai Bay region.

Bluestar Chengrand's revenue rose to 530 million yuan in 2013, up 20 percent from the previous year. It has over 500 employees, including 200 scientists and researchers in different departments. It has sold para-aramid to countries including Germany, France, Turkey, Spain and Italy last year, at relatively competitive prices.