BASF's $10bn China site to begin producing wire, cable material in 2022

Zhanjiang, China – BASF is spending $10 billion (€8.6 billion) on an engineering plastics compounding and thermoplastic polyurethanes site in southeastern China, an investment that represents the largest ever at an integrated campus for the German chemical company.

The location in Guangdong Province, to be known as the Verbund site, will see two separate facilities built for engineering plastics compounding and TPUs, some of which will be used to make safety-enhanced cables and wires for automation and automotive, as well as lighter-weight materials for consumer goods.

BASF and the Guangdong Provincial Government signed a memorandum of understanding in Berlin for the Verbund site in July 2018. A framework agreement was reached in January 2019 between the two entities that hashed out further details of the site plan.

"Less than a year after we signed the first MoU, we are delighted to announce the first plants to be established at our smart Verbund site in Zhanjiang," said Stephan Kothrade, president of Asia Pacific Functions, and president and chairman of Greater China, BASF.

"The project is moving forward swiftly, and customers in southern China will soon benefit from these innovative products to meet their immediate needs."

BASF said it expects to begin production of materials at the site in 2022, ultimately supplying an additional 60,000 tonnes of engineered plastics compounds and TPUs to Asian customers each year.

That also would bring the annual total capacity of such BASF materials in the Asia-Pacific region to more than 290 kilotonnes per annum (ktpa).

These advanced performance materials are used in an array of products, including electronic wiring and cables, and consumer products, as well as by auto makers to reduce weight and improve efficiency and safety, according to BASF.

"In particular, electric and electronics companies and automotive manufacturers are turning to BASF to help them address trends such as the electrification of cars and miniaturisation of electronic devices," said Raimar Jahn, president of BASF's Performance Materials Division.

BASF said it will institute a comprehensive smart manufacturing concept at the Verbund site, one that uses automated packaging, high-tech control systems and automated guided vehicles, the world's largest chemical producer said.

BASF said the TPU market has led the way with increasing demand for such high-end applications, driven by increasing regulatory demands that have favoured the use of TPUs, and the related customer expectations of better sustainability for their raw materials in e-mobility, lightweight and automation.

"With customer needs evolving rapidly across the world, BASF is ramping up its investment in emerging markets to address local requirements while continuing to invest in developed economies," the company said.

The Verbund site ultimately will link upstream and downstream plants, from those producing basic chemicals to more consumer-oriented products and solutions, and serve industries such as consumer goods and transportation.

The site, once online in 2022, will represent the third-largest BASF site worldwide, followed by its headquarters in Ludwigshafen, Germany, and an integrated site in Antwerp, Belgium.

"We want to improve our support for customers in the southern China market and around the world," Jahn said. "We will do this by establishing the new plants close to growing customer industries, and through improvements in efficiency realised from our smart manufacturing approach. This will increase our speed of innovation and the efficiency of our services."

General facilities for the Verbund site also will be built along with the two new plants, according to BASF. BASF Integrated Site (Guangdong) Co. Ltd, a BASF wholly-owned subsidiary, will oversee the operations of the new Verbund site, "underlining BASF's commitment to the southern China market," the company said.

BASF's Performance Materials Division addresses transportation, construction, industrial applications and consumer goods.

BASF has six major segments, including chemicals, materials, industrial solutions, surface technologies, nutrition and care, and agricultural solutions. The company has about 122,000 employees worldwide and generated sales of about $71.1 billion in 2018.