(EnergyAsia, Feb 25) — Germany’s BASF will significantly expand its compounding capacities for engineering plastics in the Asia-Pacific region in the next two years.

The company will build a new compounding plant at its existing Pudong site in Shanghai, China. Construction of the new facility will start in the first quarter 2005. The plant will have an annual capacity of about 45,000 metric tons. It is scheduled to come on stream by end 2006.

BASF is also expanding its compounding facility in Pasir Gudang, Malaysia. The expansion from 30,000 metric tons to about 45,000 metric tons annual production capacity will be completed by the second quarter of 2005. Together with the plant in Pudong, the total investment will range in the double-digit million Euro area. Both plants produce Ultramid¨ (polyamide PA) and Ultradur¨ (polybutylene perephthalate PBT) compounds.

“The expansion of our compounding capacities is a strategic decision to meet the future demand of our customers in the fast growing market for engineering plastics in Asia,” said Raimar Jahn, President of BASF Performance Polymers.

In the next 10 years, Asia’s demand for engineering plastics is expected to grow on average by about 8% per year. Expanding the engineering plastics business in Asia is another step towards BASF’s goal to generate 20% of sales and earnings in its chemical activities in Asia and increase the share of local production to 70 % by 2010.

Raw materials for the plants in Pudong and Pasir Gudang will be partially supplied from BASF’s 50-50 joint venture with Toray in Kuantan, Malaysia. The joint venture is designed for an annual production of 60,000 metric tons polybutylene terephthalate (PBT) base resin. The foundation of the joint venture was announced in February 2004. Construction work is on schedule and the plant is expected to start commercial production in the first quarter of 2006.

After the two investments in Pudong and Pasir Gudang have been completed, BASF said its compounding capacity for engineering plastics in the Asian region will exceed 100,000 metric tons per year.

“We will be able to supply our customers in the region even better with well-established, high quality engineering plastic compounds from local production. Our aim is to be partner of choice and to help our customers to be more successful”, said Willy Hoven-Nievelstein, group vice president of BASF’s Engineering Plastics business in Asia.

Engineering plastics are used in automotive construction as well as the electrical and electronics industries. Some innovative applications include specific intake manifolds, oil sumps, gear control units, sensors, cylinder head covers, air spring and cooling elements but also roof frames and highly integrated laser structurable electronic devices.