InterviewBASF offers US co-location leases

30 January 2008 17:40  [Source: ICIS news]

By Brian Ford

NEW ORLEANS (ICIS news)--German chemical major BASF plans to offer more US co-location leases, under which companies would share the infrastructure and resources of the same production site, an executive said.

By using one of BASF’s existing manufacturing complexes, companies seeking to expand or establish their capabilities can take advantage of the chemical giant’s infrastructure, said Gilbert Muller, director of strategic planning for BASF’s North American operations. Muller is in charge of BASF’s site manufacturing co-location programme.

Under the programme, companies that sign lease and service contracts with BASF can share steam, power, waste treatment, technical services, site security and, in some cases, easier access to raw materials, Muller said.

BASF offers co-location opportunities at a 2,357-acre site in Geismar, Louisiana, as well as in Freeport, Texas and Hannibal, Missouri. Muller said the company’s smaller sites may be available for co-location as well, depending on the circumstances, Muller said.

The sites “are really ideally situated for a company to build a chemical plant,” Muller said.

“We would encourage companies to figure out how much it would cost to go on their own and then come and talk with us,” Muller said.

BASF embarked on its co-location programme in Europe 6-7 years ago. BASF has at least five other companies operating on its site in Schwarzheid, Germany.

The programme was begun in the US three years ago and has resulted in one finalised co-location contract and several prospects, Muller said.

Muller acknowledged that the concept faces some hurdles in the US. “For many companies, locating at some other company’s site is almost an unnatural act,” he said.

Also, BASF must determine whether a prospective company provides a good fit with its own operations. The company also requires that, at the end of a lease period, the leasing company must leave the site in the same condition as before.

“We don’t want a white elephant on our hands” at the end of a lease, Muller said.

BASF must also deal with the issue of whether it has the infrastructure to spare for a lease that could last up to 25 years, Muller said.

“There are a lot of reason’s why these things don’t go forward, but the concept is terrific,” he said.

By: Brian Ford
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