Isocyanates Complex Opens In China

BASF, Huntsman Corp., and three Chinese partners have begun production at a $1 billion integrated isocyanates complex at Shanghai Chemical Industry Park, in China.

The Chinese partners in the project are Shanghai Hua Yi, Sinopec Shanghai Gao Qiao Petrochemical, and Shanghai Chloro-Alkali Chemical.

The facilities have the capacity to produce annually up to 240,000 metric tons of crude methylene diphenyl diisocyanate (MDI) and 160,000 metric tons of toluene diisocyanate (TDI) and will serve the rapidly growing market for polyurethanes in China.

Industry economists expect the Chinese market will grow about 10% per year through 2015, making China the world's largest market for polyurethane resins, which are used in the automotive and construction industries, in appliances such as refrigerators, and in upholstery and footwear.

"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," says John Feldmann, a member of BASF's board of executive directors.

"In addition," he says, "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, the world's biggest chemical company, plans to invest about $1.28 billion in the Asia-Pacific region, most of that in China, through 2009. The company aims to generate 10% of its global chemical business sales and earnings from China by 2010. It had sales of about $2.33 billion in China in 2005, which amounted to about 6% of the global figure.

Huntsman is also increasing its presence in China to take advantage of soaring demand for chemicals. "The Chinese economy is growing strongly and China is rapidly becoming a major area of focus for all of our business divisions," says Peter R. Huntsman, president and chief executive officer.

The same five companies also plan to build a new 400,000-metric-ton MDI plant that would come onstream after 2010. Feasibility studies are still being conducted for the project. "We know that the capacity is necessary, but we're still evaluating the best place to put it," says Don H. Olsen, Huntsman???s senior vice president for global public affairs.