BASF signs MoU for chemical facility in China

By Natasha Spencer

- Last updated on GMT

BASF signs MoU for chemical facility in China
German chemical company, BASF, enters into a Memorandum of Understanding (MoU) to consider the launch of its first fully-owned production plant in China.

The ingredient leader is now weighing up the opportunities associated with building a new chemical production site in Guangdong to produce consumer goods products.  

If the chemicals leader goes ahead with the construction, the Chinese development in the South Chinese province will represent its first wholly-owned plant in China.

MoU agreement

Martin Brudermueller, Chairman of the Board of Executive Directors and Chief Technology Officer (CTO) at BASF SE visited the German-Chinese Forum for economic cooperation in Berlin, reports Reuters​.

On 9th July, the Chairman and Chief Technology Officer signed a MoU for the Guangdong-based $10 bn (€8.5 bn) site, which has the potential to take on 2,000 staff and 1,000 external contractors.

With a completion date of 2030, the newly-proposed plant will initially contain petrochemical plants, along with a steam cracker that produces ethylene.

In June 2018, China revealed that it anticipated a long future ahead where opportunities would be opened up to accommodate foreign investment restrictions. This comes as Beijing, in particular, pledges to make its industries more accessible to overseas investors going forward.

This consideration comes as Li Keqiang, Chinese Prime Minister, and Angela Merkel, German Chancellor, met in Berlin, Germany to consider trade relations and obstacles to overcome between China, Europe and the US. 

GMP and production

BASF’s latest deal, if it goes ahead, will represent the integrated chemical unit’s largest investment to date. It will also be the chemical company’s third biggest global site, after its headquarters in Ludwigshafen, Germany, and Antwerp, Belgium.

Known as “Verbund”​, BASF remains today’s only key global ingredient name that utilises an integrated value chain through owning other organisations during the entire production process.

The move comes after Cosmetics Design Europe reported that the chemical company achieved EFfDCI’s Good Manufacturing Practice Certification in May 2018 for cosmetics applications​.

This relates to all of its personal care sites and so may well be a key aim for BASF if it decides to go forward with the construction of its Chinese production plant.

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