Ludwigshafen, Germany - BASF is to begin expanding its capacity for epsilon-caprolactone (CLO) with a project to raise its annual capacity by up to 2000 tonnes in 2008.
And the group said that, to meet market growth, "further capital has been earmarked for projects to expand CLO and its value chain in subsequent years."
BASF did not give any financial details of the expansion.
BASF said it has been producing CLO since 2001 and currently makes it at its Freeport, Texas site.
According to a BASF spokesperson, the company is studying whether to add the capacity at its sites in the NAFTA (North American Free Trade Agreement) region, or in Europe.
CLO and its polymers are used as intermediates in a variety of applications in many industries including thermoplastic polyurethanes (TPU) and adhesives and coatings, where it provides a high-quality combination of properties.
After the expansion, BASF said, its total CLO annual capacity will be between 5000 and 10 000 tonnes.
BASF's CLO materials compete with the caprolactones made until recently by Solvay in the UK, a business which has been sold to Perstorp of Sweden.
Japanese company Daicel also makes caprolactones.