The partnership has spanned 16 years and has now seen a $500 million in an integrated project at their existing joint venture site BASF PETRONAS Chemicals in Gebeng, Kuantan.
"This investment is built on the solid, long-term relationship with our strategic partner PCG. Since the establishment of our joint venture, BASF and PCG have successfully served the needs of the region with high-quality and innovative products," said Dr. Martin Brudermüller, vice chairman of the Board of Executive Directors of BASF SE, responsible for Asia Pacific.
The focus of the complex will be a plant for citral and precursor plants. Citral is nature-identical to the main component of many essential oils and is used as fresh-citrus and fruity notes in fragrances and flavors.
The partners will also invest in downstream production for aroma ingredients including a new world-scale plant for L-menthol and a plant for citronellol. Production will be developed in phases, with the first plants of the project operational in 2016, creating some 110 new employment opportunities.
L-menthol is popular as an ingredient in numerous products in oral care and body care.
"With this strategic investment we are increasing our contribution to the aroma ingredients market to bring attractive fragrances and flavors to our daily lives. Embedding this investment into our Kuantan Verbund allows our customers to benefit from a global production network for their future growth plans in the Asia Pacific region," said Saori Dubourg, president Asia Pacific BASF.
PCG chairman Datuk Wan Zulkiflee Wan Ariffin believes the integrated aroma chemicals complex will open up a new business frontier for the company, tapping into the flavors, fragrance and pharmaceuticals markets.
"The Gebeng expansion adds further value creation to our existing product streams and we are strengthening the joint venture by leveraging on our strategic partner's technology and expertise in the aroma ingredients," adds Dr. Abd Hapiz Abdullah, CEO of PCG.