Issue Date: October 15, 2007
BASF Dedicates Two Texas Plants
BASF EXECUTIVES enjoy showing off complete manufacturing integration, a concept they call by the German word Verbund. They did this last week at the opening of two new world-scale plants in Freeport, Texas. The facilities establish the site as BASF's integrated production base for nylon 6 and superabsorbent polymers (SAPs) in North America.
Investing more than $200 million in the plants "demonstrates our long-term commitment to Freeport and to BASF in the U.S.," said Kurt Bock, CEO of BASF's North American arm, at the event. BASF's strategy is to strengthen its U.S. base while seeking logistical and cost-saving benefits that improve its competitive position, he explained. The company has been restructuring its North American operations along these lines for about two years.
To combine production of polymers and their feedstocks, BASF built a 120,000-metric-ton-per-year nylon 6 plant near a facility producing caprolactam. The new nylon plant replaces one about half as big that BASF has closed in Enka, N.C. It also supplants material previously obtained through toll agreements and adds 30,000 metric tons of new capacity. The output will go largely to North American engineering plastics markets, said Harald Lauke, president of BASF's performance polymers division.
Likewise, the new SAP plant is fed by nearby acrylic acid production. The 180,000-metric-ton plant replaces smaller SAP units BASF has shut down in Aberdeen, Miss., and Portsmouth, Va., while adding 20,000 metric tons of capacity. BASF has been installing proprietary SAP production technology at its worldwide sites since 2002, said Markus Kramer, president of BASF's functional polymers division.
In 1958, Freeport was BASF's first manufacturing site outside of Europe and remains a cornerstone of its operations, Bock said. The two latest plants started up in July and already are running at full capacity. High costs and labor shortages make it extremely tough to build a case for investing on the Gulf Coast, Bock noted. Nevertheless, in pursuit of Verbund, BASF will have spent $500 million along the Gulf between 2006 and 2007 that includes expanding plants in Freeport; Geismar, La.; and Pasadena, Texas.
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