Construction of additional MDI plant in China considered

BASF, Huntsman, and a group of Chinese companies – Shanghai Hua Yi (Group Company), Sinopec Shanghai Gao Qiao Petrochemical Corporation and Shanghai Chloro-Alkali Chemical Co., Ltd. – are considering the construction of a new MDI (diphenylmethane diisocyanate) plant in China to meet growing demand for this product.

Several sites for the plant are being evaluated. The startup is planned from 2010 onward, and the plant is expected to have a capacity of 400,000 metric tons per year of crude MDI.

“The market for polyurethanes in China is expected to grow at a double-digit rate and will become the largest in the world within the next decade,” said Jean-Pierre Dhanis, president of BASF’s polyurethanes division.

MDI is an important precursor in the manufacture of polyurethanes – versatile polymers that are used in the automotive and construction industries, in appliances such as refrigerators, and in footwear.

As part of BASF’s investment strategy for the Chinese market, an integrated isocyanates complex is currently under construction at the Shanghai Chemical Industry Park in Caojing. This project is progressing as scheduled, and is expected to begin commercial production by mid-2006. The complex is also a joint venture between BASF, Huntsman, and the same group of Chinese companies mentioned above. It will have a capacity of 240,000 metric tons per year of crude MDI, and 160,000 metric tons per year of TDI (toluene diisocyanate). The total cost for the complex is about $1 billion.