BASF Capital Expenditures of About e400 Million Planned
8 March 2000
Capital Expenditures of About e400 Million Planned: Basf to Further Expand Operations in Korea
LUDWIGSHAFEN, Germany--March 8, 2000--BASF will considerably expand its operations in Korea in the coming years, consistently pursuing its strategy of being close to customers and developing a regional presence in its core businesses in Asia.BASF plans to invest approximately (e)400 million to build and enlarge its plants that manufacture plastics precursors, specialty chemicals and fiber intermediates. Dr. Juergen Strube, the Chairman of the Board of Executive Directors of BASF Aktiengesellschaft, and BASF board member Dr. Juergen Hambrecht explained these investments to H. E. Kim Dae-jung, President of the Republic of Korea, when they were received by him on March 8, 2000, in Frankfurt.
In Korea, BASF will take advantage of the opportunities that integrated chemical production offers by expanding its production sites in Yosu and Ulsan. This expansion will also create the best logistical conditions to supply Asia, the region expected to experience the highest growth rates for polyurethane plastics during the next 10 years.
Against this background, BASF will expand its isocyanate production in Yosu, substantially consolidating its strong position in Asia in polyurethanes. As part of this extension, BASF will build by early 2003 a new TDI plant with an annual capacity of 140,000 metric tons. The production capacity of the existing MDI plant will be expanded to 160,000 metric tons per year by 2004 through debottlenecking measures.
In addition, BASF will strengthen its Verbund production at the Yosu site in Korea by building by a new plant for acid chlorides and chloroformates. The plant, which will have an annual production capacity of 20,000 metric tons, will begin operations by mid-2002. Acid chlorides and chloroformates are used to manufacture products such as catalysts for plastics production, antibiotics, pharmaceutical active ingredients and crop protection agents.
BASF also plans to expand polyether polyols production at its site in Ulsan, Korea, from the current annual capacity of 12,000 metric tons to a total of 30,000 metric tons. Like MDI and TDI, polyether polyols are important intermediates used to manufacture polyurethanes. These versatile plastics are used in the automotive and construction industries as well as to manufacture refrigerators, upholstered furniture and mattresses.
At the end of 1999, a new butanediol and tetrahydrofuran plant with an annual capacity of 50,000 metric tons began operations at the Ulsan site. The annual capacity of the polyTHF plant is being raised to 30,000 metric tons from 20,000 metric tons. The increased volumes of polyTHF, which is used mainly to manufacture elastomeric fibers, will be available from April 2000. This expansion shows that BASF is responding to the growing demand for polyTHF in Asia.
BASF, which has 1,100 employees in Korea, had sales in 1998 of (e)560 million in the country, with 65 percent coming from local production. In recent years, BASF Company Ltd., which was founded in 1998 to combine together all of BASF's Korean operations, has expanded its product portfolio primarily through acquisitions and has considerably strengthened its market position. With capital expenditures approaching (e)1 billion, Korea is among BASF's most important countries in Asia.
In addition to the expansion in Korea, BASF is building or plans to build integrated production plants in Kuantan, Malaysia; Seraya, Singapore as well as Nanjing and Caojing in China. The expansion of BASF's TDI/MDI operations in Korea will be supplemented by a similar plant in Caojing/China that BASF is planning with Chinese Partners (TDI) and Huntsman Polyurethanes, Nippon Polyurethanes Co. Ltd. and Chinese Partners (MDI). The project proposal for these operations was submitted to the Chinese authorities in 1999. Approval of this proposal is expected to be granted shortly.
BASF is a return-focused global company generating long-term growth and profitability from its activities in chemicals, health and nutrition, and oil and gas. The company's product range includes high-value chemicals, plastics, dyestuffs, dispersions, automobile and industrial coatings, crop protection agents, pharmaceuticals, fine chemicals, crude oil and natural gas. BASF's approach to integration, known in German as "Verbund," is one of the company's particular strengths and provides a unique competitive advantage. With sales in 1998 of (e) 27.6 billion (about $29 billion) and a workforce of 105,000 employees, BASF is one of the world's top chemical companies. BASF's Internet address is www.basf.com.
(e) = Euro dollar