BASF studying $10bn chemical plant in China

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Photo by Bundesregierung Lin Shaochun of Guangdong Province (L) and BASF chairman Martin Brudermüller sign the MoU in the presence of German chancellor Angela Merkel and Chinese Premier Li Keqiang

German chemicals company BASF SE has signed a memorandum of understanding (MoU) to build its third largest chemicals complex in the Chinese southern province of Guangdong.

The MoU, which was signed in the presence of German chancellor Angela Merkel and Chinese prime minister Li Keqiang, envisages the building of a so-called ‘Verbund’ complex – the integrated value chain where a company owns businesses throughout the production process.

The project is estimated at $10bn (€8.5bn) and will mark BASF’s "largest [single] investment", the company announced 9 July.

The complex will be fully operated by BASF. Construction is set to be completed by 2030, with the first plants scheduled for start-up by 2026.

In the initial phase, the project would consist of petrochemical plants, including a steam cracker with a planned capacity of 1 million tonnes of ethylene per year.

Later, the Ludwigshafen-based company is planning to build plants for “more consumer-oriented” products and solutions, for markets such as transportation or consumer goods.

BASF says it will incorporate a “comprehensive smart manufacturing concept based on cutting-edge technologies”, an apparent reference to the company’s ambition to create an advanced, connected Industry 4.0 environment at the new complex.

Ultimately, BASF expects the site to be its third-largest worldwide, following Ludwigshafen, Germany, and Antwerp, Belgium.

The non-binding MoU was signed in Berlin between Martin Brudermüller, BASF’s chairman of the board of executive directors, and Lin Shaochun, executive vice governor of Guangdong province.

With more than 110 million residents, Guangdong is the most populous province in China. Its gross domestic product, currently growing at 7% annually, already exceeds that of Spain and is "soon" expected to reached that of South Korea. 

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