BASF said it will start construction of its proposed new MDI plant in Geismar, Louisiana, USA, in the early part of this year’s second quarter. Planning and engineering for the unit started in 2016 and have recently completed.

The 300,000 t/y facility will expand the German group’s capacity at the site to almost 600,000 t/y when it is completed, scheduled by the end of 2020. Output will supply the growing North American market.

According to the Louisiana Economic Development agency, BASF will initially invest $150 million to build the MDI synthesis unit, with plans to build further production plants in later stages.

The state of Louisiana has offered BASF an incentive package that includes a modernization tax credit amounting to $1.65 million to be claimed in equal installments over five years. BASF is also expected to utilize Louisiana’s Industrial Tax Exemption and Quality Jobs programs.

State governor John Bel Edwards said Louisiana excels in chemical manufacturing because of its outstanding infrastructure, great business climate and a workforce that leads the US in productivity.

US industrial gases group Praxair, currently in the middle of an attempted merger with German rival Linde, announced last October it had signed a long-term deal with BASF to design, build, own and operate a syngas processing plant at Geismar.

The plant, which will also start operations in 2020, will produce high-purity carbon monoxide and hydrogen.