BASF Taps China for New Chemical Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--China continues to be an increasingly important market for German-based chemical major BASF SE (Ludwigshafen, Germany) as it confirmed plans to build a new world-scale neopentyl glycol (NPG) plant, with an annual production capacity of 80,000 metric tons per year, at its Zhanjiang Verbund site.

Located in southern China, the US$110 million plant is the newest addition to the Verbund site in Zhanjiang, a massive undertaking that has been under construction since 2019. BASF expects to invest up to 10 billion euro (US$10.1 billion) in the Zhanjiang Verbund complex, which will make it the company's third largest after Ludwigshafen in Germany and Antwerp in Belgium. The new NPG plant will be commissioned in late 2025, boosting the company's global NPG capacity from 255,000 metric tons to 335,000 metric tons annually. Currently, BASF has NPG production facilities in Ludwigshafen, Freeport in Texas, as well as in Nanjing and Jilin, China.

NPG is an intermediate mainly used in the production of powder coating resins, that in turn are used mainly in the construction and automotive industries and for coating household appliances. Other key applications for NPG include the manufacture of lubricants, plasticizers and pharmaceuticals. According to Future Market Insights, surging adoption of the intermediate in the industrial sector will boost the NPG market size in China. The demand for paints and coatings in China is increasing due to growing applications in the industrial sector. The country is estimated to remain a key producer and consumer of NPG, accounting for about 66% of the Asia market share in 2022. Demand out to 2032 is expected to grow at a healthy 5.5% compound average growth rate.

Vasilios Galanos, senior vice president, Intermediates Asia Pacific, BASF, said, "Investing in an NPG plant at the Zhanjiang Verbund site will enable us to support the growing demand from customers in Asia, particularly in the field of powder coatings in China. Leveraging the synergies arising from our unique Verbund model and top-notch technologies, we are confident that our investment in the NPG plant will enhance our competitive edge mainly in China, the world's largest chemical market."

"We are responding to the growing demand of Chinese customers for environmentally friendly powder coatings," added Anup Pandey, director of business management, Acids & Polyalcohols, BASF Intermediates Asia Pacific. "We will step up the construction of the new NPG plant to support the growth of our business partners, while expanding our footprint and sustaining our position as a leading supplier in this vast market."

The Zhanjiang Verbund complex, which is being built in phases and will be fully completed by 2030, will boast a steam cracker with a capacity of 1 million metric tons of ethylene per year and downstream plants. The first plant producing engineering plastics was commissioned in September. The next start-up, planned for 2023, is a plant producing thermoplastic polyurethanes (TPU) to serve mainly a variety of industries in southern China and Asia. Both plants will be powered by 100% renewable energy.

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