BASF (Ludwigshafen, Germany; www.basf.com) said it has initiated the third and final round of its North American capacity upgrade for the polyurethane precursor MDI. When the three-stage project is completed in 2025, the company says it will have doubled MDI output capability at the site to 600,000 t/y.

Announcing the plans in 2016 (see Plasteurope.com of 18.11.2016), BASF said it was reacting to demand from customers in North America, where all the additional volume is to be sold. The German-multinational group said it selected Geismar for the build-up to benefit from the Gulf region’s abundance of cheap shale gas-based feedstock.

Michael Heinz, CEO of the company’s US-based unit, said the investment underlines the group’s commitment to North America, and strengthens its supply reliability and the competitiveness of its regional customers’ value chains.

The final stage of the more than EUR 1 bn undertaking, planned to encompass two new upstream units and a splitter, will be the most expensive at USD 780 mn (EUR 762 mn). The price tag of the second stage, completed in late 2021, was cited at USD 87 mn, while the first investment round concluded in October 2020 cost USD 150 mn.

BASF’s mammoth project is receiving investment incentives from the state of Louisiana. According to local media, the package includes a USD 1 mn Retention and Modernization Tax Credit, to be claimed in equal instalments over five years.

The German chemical giant, one of many non-US players active in the Gulf region, is also eligible to tap the state’s Industrial Tax Exemption and Quality Jobs programmes.

Over all three MDI expansion stages and other site investments, BASF will retain more than 1,000 existing jobs and add nearly 40 direct jobs and almost 150 indirect jobs, the state business promotion agency Louisiana Economic Development (LED) said.

Since 2009, BASF has invested more than USD 2 bn in new chemical projects and improvements in Geismar, said Jerry Lebold, senior VP and general manager at the site.

BASF is not the only foreign investor to be wooed by Louisiana. US competitor Huntsman (The Woodlands, Texas; www.huntsman.com) recently began commercial operation of its new EUR 180 mn MDI splitter in Geismar (see Plasteurope.com of 19.07.2022). Wanhua (Yantai, Shandong, China; www.whchem.com/en), the global MDI heavyweight, is not yet present on the US market for the PU precursor but is building a plant in Louisiana’s St. James Parish (see Plasteurope.com of 21.11.2018). Both projects are eligible for investment incentives.

According to Plasteurope.com’s Polyglobe database (www.polyglobe.net), Wanhua is the world’s largest producer of MDI but has a lot of catching up to do in North America. Huntsman is the region’s market leader, followed by BASF, Dow, and Covestro.