A letter of intent has been signed between BASF and Zhejiang Guanghua Technology Co., Ltd. (KHUA) for neopentyl glycol (NPG) to be supplies from BASF’s Zhanjiang site to KHUA, a manufacturer of saturated polyester resins used in the Chinese powder coatings industry. KHUA plans to build a 100 kiloton per annum production plant for high-end powder coating resins in the same region that BASF is building a world-scale NPG plant with an 80,000 metric ton annual capacity.

NPG is an intermediate used in the production of powder coating resins used in household appliances and the construction industry. Their low volatile organic compounds (VOCs), powder coatings allow users to comply with VOC emission standards. NPG is also used in the manufacture of lubricants, plasticizers, and pharmaceuticals.

Vasilios Galanos, Senior Vice President, Intermediates Asia Pacific, BASF, said, “this partnership will help to meet the growing demand for eco-friendly powder coatings in China and the wider Asia Pacific region.”

“We have high hopes of BASF’s Zhanjiang Verbund site, which will set a new standard in the petrochemical industry by utilizing clean energy, conserving energy, and reducing emissions.” said Jeffrey Sun, Chairman, KHUA.

The new NPG site is expected to be operational from Q4 2025 and will boost BASF’s global capacity 30%. Upon completion it will be BASF’s fifth facility for NPG production with others located in Lugwigshafen, Germany; Freeport, US; and Nanjing and Jilin in China.