BASF AG partners with S. Korea firm
LUDWIGSHAFEN, GERMANY — BASF AG plans to boost production of polyurethane materials in South Korea, in part with a new alliance with Seoul-based Hanwha Chemical Corp.
BASF said its Seoul-based subsidiary, BASF Co. Ltd., aims to start a new, 309 million pound-per-year toluene diisocyanate plant in Yosu, South Korea, in 2003, while doubling capacity of its existing 176-million-pound methylene diphenyl diisocyanate facility by 2004.
Meanwhile, Ludwigshafen-based BASF agreed to invest $106 million to acquire a 14.2 percent stake in Hanwha, which will supply BASF's isocyanate operations with a secure feed of chlorine. In return, BASF will supply Hanwha with hydrogen chloride from its PU raw materials plants in South Korea.
BASF is strengthening its PU position in South Korea to meet demand in the coming decade, particularly from the automotive industry.
Under the Korean deal, BASF will be allowed to sell its acquired shares at the same price back to Hanwha Chemical's largest shareholder, Hanwha Corp. of Seoul, after seven years.
Qenos closing two plants down under
MELBOURNE, AUSTRALIA — Melbourne-based Qenos Pty. Ltd. is closing its low density polyethylene and styrene butadiene rubber plants in Altona, Australia, to focus on growing markets, said spokesman Barry Oosthuizen.
Qenos includes the PE, polypropylene and synthetic rubber operations of Melbourne-based chemical company Orica Ltd., and Exxon-Mobil Corp.'s Kemcor Australia Pty. Ltd., also in Melbourne. The joint venture took the Qenos name in 1999.
The SBR plant will operate until early this year, after which Qenos will supply its Australian customers with imported product.
Qenos also makes LDPE at Botany Bay, Australia. The smaller Altona plant is closed and will not reopen. Oosthuizen said the Botany Bay plant had produced about 90 percent of the company's LDPE output.
Oosthuizen said decreasing domestic demand, raw material shortages and reduced profitability contributed to the decision.
"The market is shifting, as all markets do. We are refocusing on the growth segments," he said, adding that the closed plants served stagnant market segments.
"We are a major domestic supplier, and even so, we still have to compete on an international scale. We have got to do everything as cheaply and efficiently as other manufacturers," he said.
Robert Fairley, Qenos managing director, said the plant closure will mean a 10 percent reduction in the company's work force. He added that Qenos will invest A$70 million (US$37.9 million) during the next three years to expand high and linear low density PE production in Altona and Botany Bay.
When the expansions are complete, Qenos will have the ability to supply more than 880 million pounds of PE annually, which Fairley estimated as 80 percent of Australia's demand.
Borealis increases ethylene capacity
PORVOO, FINLAND — Borealis A/S plans to streamline its ethylene cracker at Porvoo, boosting capacity by 10 percent to 683 million pounds.
Lyngby, Denmark-based Borealis said it will modify the facility's gas compressor and replace the ethylene splitter.
The polyolefin cracker feeds integrated polyethylene and polypropylene plants at Porvoo. The upgrade should be complete by May 2002, Borealis said.
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