Geismar, La. — BASF SE will proceed with the second phase of its production expansion for methylene diphenyl diisocyanate (MDI) at its Geismar chemical complex.
The expansion will double its production of MDI from 300,000 metric tons to about 600,000 metric tons with the multiphase project, according to a BASF news release. BASF will make an $87 million capital investment to continue the expansion, following a $150 million investment for the first phase.
The first phase is expected to be finalized in the first half of 2020, BASF said. The second phase of the project will retain 1,238 BASF jobs at Geismar, the company's largest manufacturing site in North America. Construction is expected to start by the end of 2019, with completion scheduled for 2021. The company estimates the project will support 170 construction jobs. The MDI plant has been a central aspect of the Geismar manufacturing center for more than 30 years.
"With the development of the American market, BASF needs this investment to support the growth of our existing customers," Stefan Doerr, head of BASF's regional business unit monomers in North America, said in a statement. "The Geismar site is ideally suited for this investment thanks to the existing infrastructure, competitive raw materials and favorable business support from state and local governments."
BASF has invested more than $800 million in major capital projects in Ascension Parish, the area where the facility is located, since 2009. For the second phase, the company is expected to utilize the state's Industrial Tax Exemption Program, BASF said.
MDI is used by industrial customers to produce polyurethanes, which contribute to improved insulation for appliances, lighter materials for cars and energy efficiency in buildings. BASF operates a global production network of MDI facilities in China, South Korea, Belgium and the U.S.