BASF and Xinjiang Markor Chemical Industry Co., Ltd. (Markor) plan to establish two joint ventures to make butanediol (BDO) and polytetrahydrofuran (Poly THF), in Korla, Xinjiang Uygur autonomous region, Northwest China.
The joint venture agreements have already been signed but the firms say, they are subject to further closing conditions and regulatory approvals.
The joint venture companies intend to build a plant to make BDO and one to make PolyTHF. These are planned to go on stream in 2015. The annual capacities of the plants located in Korla will be 100,000 tonnes of BDO and 50,000 tonnes of PolyTHF.
BASF declined to specify the investment levels, or equity structure of the joint venture but confirmed that a condition of the deal was that the plant was situated in Korla, rather than at its other sites in China. Makor has two existing BDO plants at Korla and has total BDO capacity in China of 160,000 tonnes. Markor has invested about RMB 5 billion (about €600 million) in the Korla Chemical Park, before this announcement.
"We are aiming to expand our local production capacity in order to support our customers in the Chinese market," said Dr. Guido Voit, Senior Vice President, responsible for the region Asia Pacific within BASF's Intermediates division.
"Thanks to our integrated value chain, we can achieve great synergies, enabling us to serve our customers better. We look forward to working with BASF to further expand our joint business in China," said Mr. He Xiaorong, Vice President of Markor Group.
BASF produces PolyTHF at the following sites Geismar, Louisiana, USA; Ludwigshafen, Germany; Ulsan, Korea and Shanghai, Caojing, China. It's PolyTHF capacity is 250,000 tonnes/year.
BASF has 535,000 tonnes of annual BDO capacity with plants at Geismar; Ludwigshafen; Caojing; Chiba, Japan and Kuantan, Malaysia.
According to a report from KPMG, a business consultancy, China accounted for 20% of polyurethane demand in 2011. Research China puts the .
PolyTHF is primarily used to make elastic spandex fibers for a large variety of textiles, including underwear, outerwear, sportswear and swimsuits. It also serves as a chemical building block for thermoplastic polyurethanes (TPU) used to make hoses, films and cable sheathing.
Other applications include thermoplastic polyetheresters, polyetheramides and cast polyurethane elastomers for the production of for example wheels for skateboards and inline skates. BDO is used in the manufacturing of technical plastics, polyurethanes, solvents, electronic chemicals and elastic fibres.