Bayer Joins $252 Million Domestic Chlorine Capacity Expansion Trend

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Researched by Industrial Info Resources (Sugar Land, Texas). Bayer Corporation (Pittsburgh, Pennsylvania), a subsidiary of Bayer AG (LeverKusen, Germany), is preparing to begin construction immediately for an estimated $100 million expansion of their nearly 300,000-ton per year chlorine unit located at the Baytown, Texas plant site. Bayer is self-performing the engineering for this project, with plans to add new electrolytic cell units increasing the plant’s overall capacity to an estimated 500,000 tons per year when completed late next year. Bayer, like many of its peer producers of chlorine and caustic soda, is enjoying strong demand from its downstream markets such as vinyl chlorides, polyurethanes and solvents.

Bayer’s investment raises the total for this industry sector during 2006 to over $252 million in capital projects, a sharp increase over the $144 million Industrial Info had reported in an Industry Alert titled “ Chlor Alkali Producers Prepare for a Year of Increased Spending in 2006” published late last year. Much of the new capacity these investments will bring to the market will not be realized until late 2007, or even early 2008. The only short-term new capacity in the market began production this past March by Equa-Chlor LLC (Portland, Oregon) at its nearly 80,000-ton per year chlorine plant located in Longview, Washington. Equa-Chlor is already in the early planning phase of increasing the capacity of the new plant by as much as 50% by the spring of 2008.

Bayer’s chlorine expansion comes on the heels of several major investments at this site, including an ongoing expansion of methylene di-aniline (MDA), maleic anhydride (MA) and polymeric iscoyanates (MR) plus the debottleneck of methyl diisocyanate (MDI). These investments, and other Bayer projects being tracked by Industrial Info, total over $188 million in capital and maintenance-related projects that are planned to begin construction this year and into early 2007.

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