18 January 2012 17:03 [Source: ICIS news]
By Heidi Finch
LONDON (ICIS)--BASF’s competitive cost structure and its growth expectations for toluene di-isocyanate (TDI) in eastern Europe, the Middle East and Africa are underpinning its new capacity plans at Ludwigshafen in Germany, a company source said on Wednesday.
Extensive research has shown that TDI demand from now until 2020 is likely to grow in the Europe, Middle East and Africa region by around 5.5%, the company source said, driven by the emerging markets of eastern Europe and the Middle East and Africa.
Demand in the more mature northwest Europe market, however, is likely to be linked to GDP performance.
On Tuesday this week, the BASF announced plans to invest around €1bn in the construction of a new 300,000 tonne/year single train TDI facility, and new TDI precursor facilities at its main Ludwigshafen site.
The TDI unit is expected to be operational by the end of 2014, at which time the company’s existing 80,000 tonne/year TDI facility is due to be closed.
Also expected for 2014 is Bayer Material Science's (BMS's) new 300,000 tonne/year TDI facility at Dormagen, Germany, which is set to replace an existing TDI plant and pilot plant with combined capacities of 90,000 tonnes/year.
At Brunsbuettel, also in Germany, BMS intends to convert a 125,000 tonne/year TDI plant into a 220,000 tonne/year MDI facility.
On Wednesday, a BMS spokesperson said there are no changes to its original capacity plans, which are still pending regulatory approval.
The BASF source said it was confident there is room for two new TDI sites in Europe, especially with the cost-competitive integrated "verbund" site structure and the closures of other European capacities, as well as expected growth potential in the emerging markets.
The latest capacity addition to the European TDI market has been BorsodChem’s TDI 2 facility at its Kazincbarcika site in Hungary, which came on line in mid-2011 with an initial capacity of 160,000 tonnes/year, but which can be raised to 200,000 tonnes/year.
Following the start-up of this second TDI unit, BorsodChem temporarily idled its 90,000 tonne/year TDI 1 unit at the same site in August last year.
The TDI 2 facility is still currently running at reduced operating rates following the slowdown in demand in the second half of 2011, which was prompted by economic uncertainty.
Current European nameplate capacity for TDI is 786,000 tonnes/year, according to ICIS plants and projects.
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