Groudbreaking ceremony. BASF photo.

Under the expansion, BYC will raise its ethylene capacity from 600,000 metric tonnes per year to 740,000 metric tonnes per year, expand three plants and build 10 new plants. The products will serve multiple industries including agriculture, construction, electronics, pharmaceutical, automotive and chemical manufacturing.

BYC started commercial production of ethylene in June 2005 with $2.9 billion of investment. The expansion plan received approval from the Chinese central government on July 1.

Martin Brudermueller, a member of the board of executive directors, said in a news release, "The products made here ultimately contribute to the modernization and sustainable development of the Jiangsu region and China overall. With this expansion, we are putting a greater focus on specialty goods. These products are actually closely related to our daily life, especially in reducing overall energy use and creating a cleaner environment."

In related news, Ludwigshafen, Germany-based BASF today outlined its Strategy 2020 for Asia Pacific. The company's goal is to grow an average of 2 percentage points faster than the Asia Pacific chemical market each year through 2020.

With expected market growth of 4-5 percent per year, this would double BASF's sales in the region by 2020 while earning a premium on cost of capital, according to a news release from the company.

BASF will increase headcount by at least 5,000 from a current figure of approximately 15,000, and it plans to generate 70 percent of its sales in the region from local production. The company plans to invest 2 billion euros in the region between 2009 and 2013.

“The Asian growth markets will continue to provide attractive opportunities, and our Strategy 2020 will help us to realize them,” said Martin Brudermüller, a member of BASF's board responsible for Asia Pacific. “The current economic situation does not change our positive expectations of the long-term potential of these dynamic markets.”