BASF, Huntsman and Chinese Partners Celebrate Start-up of Their Integrated Isocyanates Complex

BASF, Huntsman and their Chinese partners – Shanghai Hua Yi (Group Company), Sinopec Shanghai Gao Qiao Petrochemical Corporation and Shanghai Chloro-Alkali Chemical Co. Ltd. – held an opening ceremony today (August 18, 2006) at the Shanghai Chemical Industry Park, China, to celebrate the start-up of their integrated isocyanates complex. The project involved a total capital expenditure of $1 billion, and was completed as scheduled in mid-2006.

Present at the ceremony were Dr. John Feldmann, Member of the Board of Executive Directors of BASF Aktiengesellschaft, responsible for Plastics as well as Oil & Gas, and Dr. Martin Brudermüller, Member of the Board of Executive Directors, responsible for Asia. Vice Mayor Hu Yanzhao of Shanghai Municipality and Peter Huntsman, President and CEO of Huntsman Corporation, were also in attendance.

The complex has a capacity of 240,000 metric tons per year of crude MDI (diphenylmethane diisocyanate) and 160,000 metric tons of TDI (toluene diisocyanate) per year and will serve the rapidly growing market for polyurethanes in China. In the period up to 2015, the Chinese polyurethanes market is expected to grow at about 10 percent per year, becoming the world’s largest market.

“Our isocyanate complex in Shanghai will give us an excellent competitive position to participate in the rapid growth of the Chinese market and better serve our customers from local production,” said Feldmann. “In addition, we will next year open a new facility in Pudong (Shanghai), which will produce polyurethane specialties tailored to the requirements of our Chinese customers.”

BASF is one of the largest foreign chemical investors in China, with sales of €2.8 billion in 2005 and a workforce of more than 4,000 employees. By 2010, BASF aims to generate 10 percent of its global sales and earnings in its chemical businesses in China.

“Today we are inaugurating BASF’s second largest investment project in China, which will make a significant contribution to our ambitious targets,” said Brudermüller. “Moreover, my thanks go to the outstanding efforts of all our dedicated employees, who have worked on this project since groundbreaking in spring 2004.”

The integrated isocyanates complex consists of three separate joint ventures:

  1. Shanghai Lianheng Isocyanate Co. Ltd. – A 240,000 metric tons per year crude MDI manufacturing plant including manufacturing facilities for the precursors aniline and nitrobenzene built by BASF, Huntsman, Shanghai Hua Yi (Group) Company, Shanghai Chlor-Alkali Chemical Co. Ltd. and Sinopec Shanghai Gao Qiao Petrochemical Corporation. (BASF share: 35 percent)
  2. Shanghai BASF Polyurethane Co. Ltd. – An MDI finishing plant and a 160,000 metric tons per year TDI plant with precursors nitric acid and dinitrotoluene built by BASF, Shanghai Hua Yi (Group) Company and Sinopec Shanghai Gao Qiao Petrochemical Corporation. (BASF share: 70 percent)
  3. Huntsman Polyurethanes Shanghai Ltd. – An MDI finishing plant and a prepolymers plant built by Huntsman and Shanghai Chlor-Alkali Chemical Co. Ltd.

The isocyanates MDI and TDI are important precursors in the manufacture of polyurethanes – versatile polymers that are used in many applications such as the automotive and construction industries, in appliances such as refrigerators, and for upholstery and footwear.

The partners shared the common goal of building and operating a world-scale project according to the highest environment, health and safety (EHS) standards. The project involved 29 million working hours. During the ceremony, an additional 250,000 yuan (€25,000) was donated to the “Good Neighbor” program initiated around two years ago by the three joint ventures, to help the disadvantaged within the local community.

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