17 May 2010 11:47 [Source: ICIS news]
SINGAPORE (ICIS news)--German specialty chemicals producer BASF will continue to evaluate investment opportunities in Asia as it sees healthy growth in the region despite industry concerns over looming ethylene overcapacity, a company executive said on Monday.
“In the fields where BASF [operates], we see a lot of growth,” Albert Heuser, president of BASF Asia-Pacific, told ICIS news in an interview. He added that the company’s operations were more downstream and less exposed to the ethylene market.
“We always look at opportunities wherever markets are big enough, allowing us to bring our technologies into these markets,” Heuser said.
At the Asia Petrochemical Industry Conference (APIC) 2010 in Mumbai last week, industry experts advised caution as the supply side of the petrochemical downturn has yet to hit.
About 12m tonnes/year of new ethylene capacity were expected to come on stream this year from the Middle East and China.
“The overall petrochemical industry has to face new capacities ... but it’s mainly [in] ethylene,” Heuser said, adding that BASF may not feel the pinch from the feared overcapacity.
BASF is more focussed on the propylene (C3) and butadiene (C4) value chains, which support the automotive, construction, packaging and pigments industries.
Continuous investments underpin the company’s target of doubling its sales by 2020 through growing its share of local production in Asia-Pacific to total regional sales, he said.
BASF's chemical business in the region accounted for 22% of the total €50.7bn ($62.6bn) in sales generated by the group in 2009.
“We have a clear picture where we want to be in 2020. We want to outperform the market and we want to have about 70% (of sales) out of local production serving the Asia-Pacific market,” Heuser said.
“We have to watch where, when and how we [invest]” he added.
Based on a strategy announced in September last year, BASF aims to double its sales through to 2020 by outperforming the 4-5% annual growth of the Asia-Pacific chemical market by two percentage points.
“This will mean that we will have to make further investments to keep to this [target],” Heuser said.
Heuser said BASF is keeping to its plan to invest a total of €2bn between 2009 and 2013.
Included in this investment amount is the company’s share of a $1.4bn expansion of a petrochemical facility in
The investment covers the expansion of the site’s ethylene capacity by 23% to 740,000 tonnes/year and the building of 10 new downstream plants.
“At the end of 2011, all these new plants and new capacities would be on stream,” Heuser said.
Meanwhile, BASF was still waiting for regulatory approvals for its proposed 400,000 tonne/year methyl di-p-phenylene isocyanate (MDI) complex in
“We look forward to getting final approval [on the project],” said Heuser, but declined to provide a specific timeline.
($1 = €0.81)For more on ethylene visit ICIS chemical intelligence
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