BASF Chongqing MDI Plant, China

Key Data

Chemicals giant BASF is building a methylene diphenyl diisocyanate (MDI) plant at Changshou Chemical Industry Park (CCIP), in Chongqing, south-western China. MDI is the main raw material used for the production of polyurethanes.

In June 2007, BASF, Chongqing Chemical, Pharmaceutical Holding Company (CCPHC) and local authorities signed a memorandum of cooperation to build the plant at the $4bn chemical park.

The plant will produce 400,000t of crude MDI a year. It will also produce 400,000t of MDI splitting, 400,000t of nitrobenzene and 300,000t of aniline a year. Construction of the plant will be entirely financed by BASF and will require an estimated investment of RMB8bn ($1.21bn).

The plant will cover an area of 40ha and form the central part of an integrated petroleum and gas chemical complex to be operated by CCPHC. Construction of the chemical complex is estimated to cost $5.3bn and is expected to generate RMB50bn ($7.6bn) in production value.

BASF has been operating a MDI plant in Caojing, Shanghai since 2006. The company will also setup a polyurethane solutions system house in Chongqing for local production, sales and providing technical services.

Methylene diphenyl diisocyanate (MDI) plant construction

"The Chongqing plant will produce 400,000t of crude MDI a year."

A joint study was conducted by CCPHC, BASF and the Chongqing authorities to investigate the feasibility, utilities supply, raw materials, economics and integration of the plant in the chemical park. The project received approval from the government and local authorities in March 2011. Construction was started in April.

BASF expects the project to be completed by 2013. The MDI plant is expected to start commercial operations in early 2014.

Chongqing site

Chongqing is a municipality in southwest China's Changshou district. It is located near the Yangtze River and the Three Gorges Dam area. It connects five neighbouring provinces. The CCIP was established in 2001 on an area of 31.3km².

Methylene diphenyl diisocyanate (MDI) project

The plant was delayed because of a decrease in the demand for polyurethane resulting from the global economic downturn.

"MDI is the main raw material used for the production of polyurethanes."

In January 2009, the environmental impact assessment for the project was approved by the Ministry of Environmental Protection. In September 2009, BASF briefed a proposed investment plan for the plant to be built at the chemical park.

The project will generate about 300 permanent jobs and a cluster of labour-intensive industries when it begins operations. Seventeen companies will become key partners or suppliers for the plant.

BASF has committed to produce the MDI using an environment friendly process. The company will also protect the watercourse by implementing three levels of water protection system.

The plant's products will be used for energy efficient applications such as building insulators.

Market growth

The MDI-based polyurethane is a versatile plastic used for several applications including modern building construction and automotive industry. Rigid foam products are used for cold chain food and medical packaging applications.

The PU material is also used for mattresses, upholstery and footwear. It is used for the insulation of walls, roofs and flooring applications, hot-water tanks, cooling pipes, freezing and refrigeration. MDI is also used to produce elastomers, sealants, adhesives, coatings and binders.

There is a high demand for PU in China compared with the US and European markets. China is one of the largest MDI markets in the world. Long-term growth is estimated to cross 9% annually.

The plant will be located at the Changshou Chemical Industry Park, in Chongqing, south-western China.

The plant located in the Changshou Chemical Industry Park, in Chongqing, will annually produce 400,000t of MDI splitting.

The plant connects five neighbouring provinces.