BASF Kicks off Final US Expansion Round for MDI
BASF has kicked off the third and final round of its expansion project for polyurethanes precursor MDI at Geismar, Louisiana.
The total new capacity being added up to 2025 will double the site’s output capability to 600,000 t/y from 300,000 t/y at the beginning of the project.
The Ludwigshafen, Germany-headquartered chemical multinational first announced the plans in 2016, saying the expansion would support growing demand from its North American customers. All of the output volume is planned to be sold in this geography.
In selecting the US Gulf as the site for its MDI buildup, BASF sad it wanted to take advantage of the chemicals belt’s abundance of cheap shale gas-derived feedstock.
The first phase of the project, which saw construction of a new MDI synthesis unit, went on stream in October 2020, and the second phase, which expanded several existing upstream units, started up in 2021. In the third and final investment round, several new upstream units and a splitter are to be erected.
BASF said the third expansion stage will cost $780 million. Previously, it named a figure of $150 million for the first investment round and $87 million for the second.
As an investment incentive, Louisiana’s state government initially offered a tax credit of $1 million that could be claimed in equal installments over the five years to completion. The chemical producer was also expected to be able to tap the state’s Industrial Tax Exemption and Quality Jobs programs.
“This investment underlines our commitment to North America and strengthens BASF’s supply reliability and the competitiveness of our customers’ value chains in the region,” said Michael Heinz, CEO of US subsidiary BASF Corporation.
In announcing the plans six years ago, BASF said that as one of the group’s Verbund (back-integrated) sites, Geismar is “ideally suited“ for the MDI upgrade, thanks to its existing infrastructure, reliable raw material supply, skilled workforce and community support.
BASF is world’s second largest manufacturer of the polyurethane precursor, at considerable distance behind global market leader Wanhua of South Korea and slightly ahead of compatriot Covestro. In North America, Huntsman predominates, followed by BASF.
Author: Dede Williams, Freelance Journalist
