The two MDI (diphenylmethane diisocyanate) plants at the Caojing site in China will be operated independently by the two companies in the future. Huntsman, together with Shanghai Chlor-Alkali Chemical, and BASF, together with Shanghai Hua Yi (Group company) and Sinopec Shanghai Gaoqiao Petrochemical, will each take over one of the MDI plants. MDI is an important precursor in polyurethane manufacturing, which is used in the automotive and construction industries, in appliances, and footwear. 

Ramkumar Dhruva, President Monomers division at BASF said, “The new organizational setup will allow BASF and our partners Shanghai Hua Yi and Sinopec Shanghai Gaoqiao Petrochemical Co., Ltd. to further develop our MDI operations in Shanghai while serving the demand of our customers in the region even more effectively.”

“As we move to integrate these assets into our downstream operations, we will be even better positioned to meet the future innovation and growth needs of our customers,” commented Tony Hankins, President of Huntsman Polyurethanes.

Huntsman and its partner will own and operate the original MDI plant that started commercial production in 2006, and the 2018 hydrogen chloride recycling unit for the production of chlorine, a precursor for MDI. BASF will own and operate the MDI plant that was added in 2018, including the manufacturing site for precursors aniline and nitrobenzene. All employees currently employed in the Joint Venture will be transferred to the respective organizations.

The new operational setup is expected to come into effect in Q4 this year pending approvals. In addition to the Caojing site, BASF operates MDI production in Chongqing, China and at three other global facilities. After the restructuring, BASF's global MDI manufacturing capacity will total 1.9 million tons. Huntsman also operates two other MDI production and splitting sites in addition to its Caojing facility.