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BASF Plans $720M Plant in Brazil

Tuesday, August 23, 2011

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BASF, the world’s largest chemical company, will make its largest investment in 100 years in South America with a new $720 million world-scale production site in Brazil to manufacture several coatings chemicals.

Production of acrylic acid, butyl acrylate and superabsorbent polymers (SAP) is expected to begin in 2014 at the complex in Camaçari, Bahia, Brazil. The facility will be the first acrylic acid and superabsorbents plant in South America.

BASF

BASF sales for the first half of 2011 totaled  €37.8 billion (about $54.6 billion US), an increase of 19.4% over the first half of 2010.

The investment—more than €500 million (more than $722 million US)—will be the largest in BASF’s century-long history in South America.
 
Expanded Production Planned

In addition, BASF will start to produce 2-ethyl-hexyl acrylate, an important raw material for the adhesives and special coatings industries, at its current chemical complex in Guaratinguetá, São Paulo. This will be the first plant for this product in South America.
 
With the new acrylic acid complex, BASF aims to ensure the supply for acrylic resins for coatings, textiles and adhesives and products for civil construction, and superabsorbents for diapers.
 
“BASF is the global and regional leader in the acrylic value chain,” said Dr. Stefan Marcinowski, a member of BASF SE’s  Board of Executive Directors.
 
Brazilian Boom Seen

“Due to the strong growth in Brazil, the time has come for this important investment,” said Marcinowski. “It will further strengthen our position and underlines our confidence in the development of the South American market.”

Dr. Alfred Hackenberger, president of BASF South America, said the project “reinforces the importance of the region for BASF, ensuring the supply of our products to our customers in South America and contributing to the development of the country.”
 
Braskem Partnership

The location was chosen for the availability of raw materials (propylene) and utilities provided by Braskem S.A., the major chemical company in Brazil and the strategic supplier for BASF in this project.
 
“The contract with BASF will bring benefits to the whole acrylic acid value chain—not only because of the production capacity of the project and the size of the investment, but also because of the best-in-class technology available,” said Carlos Fadigas, president of Braskem.
 
“Above this, the complex will generate new important investments to Camaçari, attracting new manufacturing companies to Bahia State.”

Construction to Begin

The construction of the new acrylic acid complex will start in 2011, employing about 1,000 individuals. Production is expected to begin in the fourth quarter of 2014, generating 230 direct and 600 indirect jobs. The production for 2-ethyl-hexyl acrylate in Guaratinguetá is expected to start in 2015 on the basis of acrylic acid produced in Camaçari.
 
“We expect the investment to bring a very positive impact of about $300 million per year on the trade balance of the country, … $200 million through reducing imports and $100 million through increasing exports,” said Hackenberger.
 
Acrylic acid is an important precursor in the value chain of super-absorbent polymers, the active component of baby diapers and other hygiene products.

Acrylic esters, the most important derivatives of acrylic acid, are used to produce adhesive raw materials, construction chemicals and architectural coatings such as Suvinil, BASF’s decorative coatings brand in South America and the leader in the premium segment in Brazil.

Comment from Chuck Pease, (9/7/2011, 10:04 PM)

Sometimes I wonder what the motives really are for some of the 3rd world expansionism that is being seen with coatings and chemical giants. Why are they buidling and expanding outside of the USA market. Is it truly becuase they see with the new global economy or is it that buidling in 3rd world nations they will not face the same regulatory standards and laws they would encounter in fully developed nations such as the UK, USA etc etc.

Comment from Tom Schwerdt, (9/12/2011, 8:38 AM)

Many nations have much weaker worker safety and environmental regulations than the USA.

Comment from Willian de Fatima Verkoelen, (3/21/2012, 4:57 AM)

Everybody benefits by producing local. With a rapid development, like all the BRIC countries,in some years there will be no big differences in safety and health rules.

Comment from Mike McCloud, (3/22/2012, 7:35 AM)

I am sure BASF is no different than ExxonMobil, Conoco Phillips or any other worldwide company, whereas they have a "No incident, no injury" policy, regardless of where they are located.