BASF Petronas Chemicals to Ramp-Up Production in Kuantan, Malaysia

BASF PETRONAS Chemicals Sdn. Bhd. (“BPC”), a joint venture between BASF and PETRONAS Chemicals Group Berhad (“PCG”), plans to expand its annual production capacity of 2-Ethylhexanoic Acid (2-EHA) at its Verbund site in Gebeng Industrial Area, Kuantan, Pahang. This milestone looks to not only strengthen the Company’s presence in Asia but also meet the demands of its customers worldwide.

BPC’s announcement was one of the key discussion points during the meeting between BASF, represented by Dr Markus Kamieth, Member of the Board of Executive Directors of BASE SE and the Trade and Investment Mission’s (TIM) delegation to Germany, led by His Honourable Dato’ Seri Mohamed Azmin Ali, Senior Minister and Minister of International Trade and Industry (MITI), on 13 October 2021.

His Honourable Dato’ Seri Mohamed Azmin Ali commended the BPC project and expansion plan in Malaysia, saying: “BPC, as a fully integrated oil and gas multinational, has been instrumental in propelling the growth and further value-adding to Malaysia’s speciality chemical ecosystem. The Government, through MITI and MIDA will continue to provide the requisite assistance to the Company to realise their future plans, reinforcing our commitment to attract and sustain quality investments in the country. This is crucial as our industries manufacture for a cleaner, greener, more sustainable future in line with the Environment, Social and Governance values (ESG) under the United Nations Sustainable Development Goals (UNSDG).”

Apart from the production site in Kuantan, Malaysia, BASF produces 2-EHA at its Verbund site in Ludwigshafen, Germany. BPC proposes to increase its annual production capacity of 2-EHA from 30,000 to 60,000 metric tons by 2024.

Mr Vasilios Galanos, Senior Vice President, Intermediates Asia Pacific of BASF commented, “We are committed to supporting our customers’ growing demand in various 2-EHA downstream applications such as synthetic lubricants for the white goods industry and PVB plasticisers for safety glass production in the construction and automotive segments. With the increased capacity, we continue to ensure persistent supply capability in Asia Pacific with the highest standard of product quality.”

Datuk Sazali Hamzah, Managing Director and CEO of PCG further elaborated, “2-EHA has been an integral part of BPC’s growth and it is timely that the expansion is planned to capture the growing market. The expansion is also in line with PCG's sustainable growth strategy to expand our portfolio with higher value products. By leveraging the existing integration between BPC and other PCG plants in the Kuantan Verbund site, we are able to maximise our value chain by improving the quality and cost competitiveness of our products and continue delivering innovative solutions to our customers.”

Mr Marko Murtonen, Managing Director of BPC also mentioned, “This expansion marks another milestone of the well-established partnership between BASF and PCG. It reinforces our commitment to expand local production to meet our growing customer demand competitively. Additionally, it caters to a rising trend on high-quality products combined with production efficiency that is well integrated into the sustainability targets of our parent companies.”

Mr Arham Abdul Rahman, Chief Executive Officer (CEO) of the Malaysian Investment Development Authority (MIDA) remarked, “The strategic venture between BASF and PCG since 1997 is among the commendable success stories in shaping the development of the chemical industry in Malaysia. BPC expansion plan is timely to strengthen the country’s chemical industry towards producing higher value-added offerings such as speciality chemicals and market-driven chemical products, which will drive the growth and development of the entire value chain.”

“Towards this, MIDA will continuously strive to improve the business landscape in Malaysia and be ever-ready to facilitate our stakeholders to spearhead the investment agenda of the country in line with the Twelfth Malaysian Plan (12MP) and our National Investment Aspirations (NIA),” he added.

2-EHA is a chemical intermediate used as a compound in the production of synthetic lubricants as well as oil additives. It is also used in functional fluids such as automotive coolants, metal salts for paint dryers, plasticisers, stabilisers and catalysts in various industries.

About
BASF PETRONAS Chemicals Sdn. Bhd.
BASF PETRONAS Chemicals Sdn Bhd. is a Malaysia based joint venture between BASF and Petroliam Nasional Berhad ( Malaysia’s fully integrated oil and gas multinational, under its subsidiary PETRONAS Chemicals Group Berhad ( Incorporated in 1997, the company operates an integrated ‘ site situated in the Gebeng Industrial Zone, Pahang. The company’s share capital is 60% held by BASF and 40% held by PCG. Key products include acrylic monomers, oxo products, 2-Ethylhexanoic acid, highly reactive polyisobutene and aroma ingredients. For more information, visit our website www.basfpetronas.com.my