BASF,Huntsman and Chinese partners to optimize capacities of polyurethanes compl

BASF, Huntsman and their Chinese partners – Shanghai Hua Yi (Group) Company, Sinopec Shanghai Gao Qiao Petrochemical Corporation and Shanghai Chloro-Alkali Chemical Co., Ltd. – have received approval from the Chinese authorities to optimize their planned integrated isocyanates complex at the Shanghai Chemical Industry Park to world-scale capacity. The capacity of crude MDI (diphenylmethane diisocyanate) will be increased from 160,000 to 240,000 metric tons per year and the capacity of TDI (toluene diisocyanate) from 130,000 to 160,000 metric tons per year. With this approval, the construction work will commence by the end of the year.

The companies also announced that they intend to supply Bayer with crude-MDI and TDI from the complex. Negotiations about the details of the supply contracts are ongoing.

For the construction of the complex, which will be built and operated through three joint ventures between BASF, Huntsman and their Chinese partners, the joint ventures have awarded the engineering, procurement and construction (EPC) contract to a consortium of Fluor Corporation, United States; Daelim, South Korea, and CTCI, Taiwan.

The isocyanates, MDI and TDI, are important precursors in the manufacture of polyurethanes – versatile polymers that are used in the automotive and construction industries, in appliances such as refrigerators, and for upholstery and footwear. The complex will supply the rapidly growing market in China for these products.

“Over the next 12 years, the market for polyurethanes in China is expected to grow at a rate of about 10 percent and will become the largest in the world by 2015,” said Jean-Pierre Dhanis, President of BASF’s Polyurethanes division. “With our isocyanate plants in Shanghai, we can now reach an economy of scale, which will give us an excellent competitive position to participate in this growth and to better serve our customers through local production.”

The total project cost for the complex is about $1 billion. The project is partially being financed through project financing by Chinese banks and is expected to start commercial production in 2006. The integrated isocyanates complex consists of three separate joint ventures:

Shanghai Lianheng Isocyanate Co., Ltd. – A 240,000 metric tons per year crude MDI manufacturing plant including manufacturing facilities for the precursors aniline and nitrobenzene which will be built by BASF, Huntsman, Shanghai Chloro-Alkali Chemical Co., Ltd., Shanghai Hua Yi Company, and Sinopec Shanghai Gao Qiao Petrochemical Corporation.

Shanghai BASF Polyurethane Co., Ltd. – An MDI finishing plant and a 160,000 metric tons per year TDI plant with precursors nitric acid and dinitrotoluene to be built by BASF, Shanghai Hua Yi (Group) Company and Sinopec Shanghai Gao Qiao Petrochemical Corporation.

Huntsman Polyurethanes Shanghai Ltd. – An MDI finishing plant to be built by Huntsman and Shanghai Chloro-Alkali Chemical Co. Ltd