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BASF moves closer to markets to cope with competition in the Middle-East

April 29/2010

(plastemart) -- Faced with strong competition from low-cost production in the Middle East, BASF is exploiting all options which extend the value chain. The company plans to cater to 70% of its business in Asia with products made in Asia.

 

As a result, its cracker in China equally owned by BASF and China"s state-owned Sinopec, is broadening its product offering. The BYC cracker complex, under expansion, is BASF"s largest in China. BASF and partner Sinopec are investing US$1.4 bln in the expansion, which involves raising the ethylene capacity from 600,000 to 740,000 tpa and building 10 new plants downstream. New products will include 2-propylheptanol, nonionic surfactants, amines and super-absorbent polymers (SAP). BYC will also extend its EO value chain by building a new amines complex for the production of ethanolamines, ethylene amines and dimethylethanolamine, used in the agriculture, pharmaceutical and surfactant sectors. By producing additional derivatives of EO such as nonionic surfactants, it is possible to compete with the Middle Eastern counterparts. BYC will also develop the cracker"s C4 chain with the manufacture of butadiene (BD) and isobutene, with derivatives including the plasticizer alcohol 2-propylheptanol and highly reactive polyisobutylene (HR-PIB), which is used in the manufacture of fuels and lubricants.

 

BASF is counting on Chinese demand developing for these niche products. BYC will implement the Nanjing expansion in phases, as market demand develops. Initial capacity expansions will be completed this year, with the bulk of the project completed by the end of 2011. Most of the Nanjing expansion project is in the engineering phase. Some construction has already commenced, focusing initially on establishing the necessary infrastructure. Work on the cracker expansion is scheduled to begin during a maintenance outage in the second quarter of this year, and the additional ethylene will become available in mid 2011.

 

The two partners plan to expand BYC by incorporating into the operation a separate BASF/Sinopec JV for the production of styrenics in Nanjing, during the course of this year. Combining the two JVs would improve the synergies between the operations. YBS, which is owned 60:40 by BASF and Sinopec, produces polystyrene (PS) and expandable polystyrene (EPS), as well as the raw material styrene monomer (SM). Along with expanding and restructuring its operations in Nanjing, BASF plans to build a wholly owned integrated methyl di-p-phenylene isocyanate (MDI) complex in Chongqing, southwest China. The project, with an MDI capacity of 400,000 tpa, is scheduled to start up in 2014. BASF expects the Chinese regulators to approve the project this year. The Nanjing and Chongqing investments are central to BASF"s plans to double its sales in Asia-Pacific by 2020.

 

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BASF moves closer to markets to cope with competition

MRC Reference

BASF. The share in the Russian market in 2008:
 PS - 9.1% (GPPS - 5.9%, ABS - 11.4%, EPS - 10.6%).

 

Annual sales growth in Russia over the 5 years:
 PS - 15%.

 

Imports by polymers processing technologies:
 foaming;
 injection molding.

 

 

 

 

 


 

 

 

 

 

 

 

 

 

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