BorsodChem inaugurates new TDI unit amid market uncertainty

30 September 2011 13:33  [Source: ICIS news]

LONDON (ICIS)--BorsodChem has officially inaugurated its new 160,000 tonne/year toluene di-isocyanate (TDI) plant, positioning itself as Europe’s leading TDI producer, the Hungarian company said on Friday.

However, BorsodChem’s CEO Wolfgang Buchele conceded that the TDI-2 plant, constructed at a cost of €200m ($270m), had moved into commercial production in an unfavourable market environment.

This meant that full utilisation of the facility, as well as a decision on whether to take up an option to expand its capacity to 200,000 tonne/year, could only be expected at a later stage.

“Since the beginning of the second quarter of this year there has of course been an economic slowdown and customers are extremely cautious with orders. In terms of planning ahead, nobody right now has a clear view,” said Buchele.

To mitigate the potential effects of any oversupply in the European isocyanates market, the company has implemented measures such as temporarily shutting down its 90,000 tonne/year TDI-1 plant, which, along with TDI-2 is located at its site in Kazincbarcika, northeastern Hungary.

BorsodChem, which ran into financial difficulties during the economic crisis, was only able to complete the TDI-2 investment after receiving fresh capital from China’s Wanhua Industrial Group, which took over the company in February.

“The opening of the TDI-2 plant is a major milestone for BorsodChem in becoming the leading supplier of TDI in the European market and an important step for Wanhua in the implementation of its ambitious global growth strategy,” said Jason Ding, CEO of Wanhua Industrial Group and chairman of the board at BorsodChem.

Following the takeover, Wanhua made BorsodChem responsible for its isocyanate operations in Europe, the Middle East and Africa.

BorsodChem was actively looking at TDI export opportunities in the Middle East but “there is quite some competition there”, Buchele said.

The company was also in the process of replacing all Wanhua’s methyl di-p-phenylene isocyanate (MDI) exports to Europe with its own product, he added.

BorsodChem’s MDI M2 unit at Kazincbarcika came back on stream earlier this month after an expansion in capacity to 240,000 tonnes/year from 150,000 tonnes/year, although it is running at reduced rates in line with sluggish domestic demand.

The 60,000 tonne/year MDI M1 plant remained idled, the company said.

($1 = €0.74)

By: Will Conroy
+44 20 8652 3214

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