Economy

BASF starts building chemical plant in SW China

(Xinhua)
Updated: 2011-04-12 07:38

CHONGQING - World-leading chemical maker BASF SE officially started on Monday the construction of a chemical plant in southwest China's Chongqing municipality.

With $1.2 billion coming from BASF SE, the project is expected to cost $5.3 billion -- the largest investment in a petroleum and gas chemical project of any German company in central and western China.

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With the State-owned Chongqing Chemical and Pharmaceutical Holding (Group) Company (CCDHGC) as its co-investor, the project is expected to realize an annual production value of 50 billion yuan ($7.64 billion) and generate 10 billion yuan in tax.

The facility, expected to start up by 2014, will produce 400,000 tons of MDI per year, said a statement on the German company's website. MDI refers to diphenylmethane diisocyanate, an organic compound used to produce polyurethane foams.

The core product MDI is widely used in industrial production, including auto manufacturing and heat insulators for home appliances and shipping containers.

Martin Brudermueller, member of the board of executive directors of BASF SE, said the new facility in Chongqing would give BASF access to one of the biggest MDI markets in the world.

China needs about 2 million tons of MDI a year, but its own production capacity can only meet half the demand, said Chongqing Mayor Huang Qifan.

Brudermueller said that BASF SE would team up with CCDHGC to develop the plant into a global leader among green chemical plants.

Having set excellent safety records in its operation along the Rhine and Mississippi rivers and the Port of Antwerp, BASF SE would integrate its global production experiences into the Southwest China project, he said.

Located near the Yangtze River, China's longest waterway, the project once aroused environmental concerns among the public.

Mayor Huang Qifan said at the launching ceremony that the facility would use environmental standards that exceed both local and national benchmarks.

"This is going to be a highly safe chemical project," Huang said.

Brudermueller also said that BASF would apply world-class safety and environmental standards in the construction and operation of the facility.

BASF said in the statement that the approval by China's State Council last month followed a strict examination of environmental, health and safety standards, two rounds of local public consultations and several experts reviews.