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Investment

BASF, Sinopec to form plastics joint venture

German chemicals giant BASF has announced plans to build a second plant in China. The production facility will be set up in the southern city of Maoming and run in a joint venture with China's Sinopec corporation.

BASF and China Petroleum & Chemical Corporation (Sinopec) had completed a joint feasibility study for a new isononanol plant and would form a 50-50 joint venture to build it, the German chemicals maker announced in a statement released Tuesday.

The new division would be called BASF IMPCC, BASF added, and was scheduled to begin production in the middle of 2015.

Isononanol is needed to produce so-called plasticizers, which are used in components production for the automobile and electrical industries as well as in toy-making and packaging.

The new plant would be built in the southeastern city of Maoming, BASF's head of Asia-Pacific Albert Heusser said, and was aimed to help meet demand for the product in China's rapidly growing chemicals market.

BASF and Sinopec already operate a petrochemicals joint venture, called BASF-YPC, in the city of Nanjing.

The announcement came after BASF on Monday called off a chemicals joint venture with Malaysian oil giant Petronas. The project had foundered on differences over terms and conditions, the two parties said, which, however, wouldn't jeopardize their commitment to continuing their existing partnership.

BASF, which is the world's largest chemicals firm, is on a course of rapid expansion in Asia, planning to more than double its revenues in the region from 13 billion euros ($17 billion) in 2010 to 29 billion euros in 2020.