Global chemicals giant BASF AG plans to invest about $2.3 billion to expand its plastics businesses in the next five years.
"Plastics are the materials of the 21st century, and our products will help to shape the future," BASF board member John Feldmann said in an April 10 news conference from Barcelona, Spain.
BASF is headquartered in Ludwigshafen, Germany.
BASF officials offered few details on how its plastics businesses would be expanded but focused on the record-setting sales and earnings showing plastics had for the firm in 2000.
BASF's plastics and fibers segment — which includes polystyrene, expandable PS, styrenic copolymers, nylon, ABS, polyurethane and other specialty plastics — rang up sales of more than $10.2 billion in 2000, a jump of almost 28 percent from 1999. Earnings for the segment were a record $727 million, an increase of almost 23 percent.
Styrenic polymers — including PS and EPS — accounted for $2.6 billion in sales, more than 50 percent over the 1999 total. In engineering plastics, sales totaled $1.66 billion while PU brought in $2.6 billion.
In the short-term, BASF officials expect plastics demand to pick up considerably in the second half of 2000 after seeing sales that were "somewhat subdued" in the first two months of the year because of slowing economies in the United States and Japan.
One of the few areas in which BASF offered specifics was in its Styrolux-brand styrenic copolymer. It plans to add about 175 million pounds of Styrolux capacity through debottleneckings and new construction in Ludwigshafen; Antwerp, Belgium; and Altamira, Mexico, said Werner Pratorius, styrenic polymers president.
Also on the project list are world-scale plants and expansions for PU feedstocks methylene diphenyl diisocyanate and toluene diisocyanate set for Yosu, Korea; and Caojing, China; by mid-2005.
A new styrene plant, being built in a joint venture with Royal Dutch/Shell Group, also is set to open in Singapore next year.
Plastics and fibers remained the largest of BASF's five operating segments in 2000, with roughly 30 percent of the firm's $33.1 billion total.
About $1.8 billion of the plastics and fibers total will be removed this year when polyolefin sales are transferred into the Basell NV venture that BASF formed with Royal Dutch/Shell.
North America continued to play a major role in BASF last year, with about a quarter of the company's total sales coming from that region. Plastics and fibers accounted for about 40 percent of the North American total.
Individually, BASF's styrenic polymers did 25 percent of its business in North America, with engineering plastics doing 22 percent there and polyurethanes doing 31 percent.