The company expects to receive final approvals from Chinese regulators by the end of this year. BASF will approve the investment in the first quarter of 2010, after finalizing all necessary agreements regarding raw materials and utilities supply and integration.

Martin Brudermueller, a member of BASF’s board of directors, spoke about the project during the recent annual Chongqing Mayor’s International Advisory council meeting.

“We believe that Chongqing, as an ambitious hub for China’s West, can take advantage of global megatrends and provide a growing local market for MDI. A new world-scale MDI plant in Chongqing based on state-of-the-art environmental health and safety standards will contribute to a balanced economic and environmental development of this community,” Brudermueller said.

He said BASF expects to create 300 permanent jobs at the Chongqing plant once it operates in full swing. Moreover, 17 plants and businesses will start as the MDI facility’s partners or suppliers, forming a manufacturing cluster.

The MDI plant will also help with the nation’s pursuit of energy efficiency, the company said. The primary application of MDI in China is insulation, which presents significant growth potential.

Latest Chinese media also quoted Brudermueller saying that the plant has already been approved by China’s Ministry of Environmental Protection.

Since the BASF plant will be located in the Three Gorges reservoir area, local residents and environmental groups had raised concern on whether the chemical production will pollute the Yangtze River.

Ludwigshafen-based BASF responded to the concern by pledging a series of measures including environmental due diligence prior to the project, high building standards for the plant, automatic shutdown mechanisms in case of a malfunction, comprehensive water protection processes, rigorous training for all employees, and periodic audits at all global locations.