BASF broke ground for its new production plant for sodium methylate in Guaratinguetá, Brazil, its largest site in South America. The plant will have a capacity of 60,000 metric tons per year and is primarily intended to supply the regional market. It is the second BASF plant for this product, in addition to a plant in Ludwigshafen. The project will involve a capital expenditure in the low double-digit million euro range.

Sodium methylate is an efficient and reliable catalyst for the production of biodiesel, which has developed into an important and increasing alternative for diesel fuels in the past years. Biodiesel meets the requirements of engine manufacturers for high-quality fuels.

BASF said it expects about 15% of the annual global demand for biodiesel, which is about 30 million tons, to come from South America in 2015.

The plant is expected to be operational from the end of 2011 onwards. Legislation in Brazil requires fuel to contain 5 percent biodiesel from 2010 onwards. Argentina has also mandated that biodiesel makes up 5% of fuel by 2010. Other South American countries have similar legislation.