Business Strategy BASF, Huntsman Along with Chinese Partner Firms to Separate Joint MDI Production

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The consortium has decided to separate their joint diphenylmethane diisocyanate production in Caojing, China. With this move, the companies will independently operate two MDI plants at the Caojing site.

Ludwigshafen/Germany – BASF and Huntsman together with their Chinese partner companies – Shanghai Hua Yi (Group Company), Sinopec Shanghai Gaoqiao Petrochemical Co. and Shanghai Chlor-Alkali Chemical Co. – have announced the planned separation of their joint MDI (diphenylmethane diisocyanate) production at Shanghai Lianheng Isocyanate Co. (SLIC). Going forward, the companies will operate the two MDI plants located at the site in Caojing, China independently. Huntsman together with Shanghai Chlor-Alkali Chemical Co., and BASF together with Shanghai Hua Yi (Group Company) and Sinopec Shanghai Gaoqiao Petrochemical Co. will each take over one of the MDI plants.

“The SLIC joint venture has been an important partnership to establish MDI production in China as one of the pioneers at the Shanghai Chemical Park,” said Ramkumar Dhruva, President Monomers division at BASF. “The new organizational setup will allow BASF and our partners Shanghai Hua Yi and Sinopec Shanghai Gaoqiao Petrochemical Co. to further develop our MDI operations in Shanghai while serving the demand of our customers in the region even more effectively.”

“Through the production of crude MDI in the SLIC joint venture over almost 20 years, Huntsman together with its partner, Shanghai Chlor-Alkali Chemical Co. has been able to successfully build its polyurethanes business in China. As we move to integrate these assets into our downstream operations, we will be even better positioned to meet the future innovation and growth needs of our customers,” said Tony Hankins, President of Huntsman Polyurethanes.

Huntsman, together with Shanghai Chlor-Alkali Chemical Co. will own and operate the original MDI plant that started commercial production in 2006, along with a hydrogen chloride recycling unit for the production of chlorine, a precursor for MDI, that was added in 2018. BASF will own and operate the MDI plant that was added in 2018, including the manufacturing facilities for the precursors aniline and nitrobenzene. All employees currently employed in the Joint Venture will be transferred to the respective organizations.

The new operational setup is in preparation and is expected to become effective during the fourth quarter of 2023, and is subject to pending regulatory authority approvals, permits and other customary closing conditions.

In addition to the plant in Caojing, BASF operates MDI production sites in Chongqing, China as well as in Yeosu, South Korea; Antwerp, Belgium; and Geismar, Louisiana. Following the restructuring of the joint venture, BASF’s global production capacity for MDI will total around 1.9 million tons.

Huntsman operates world-scale MDI production and splitting facilities in Rotterdam, the Netherlands, and Geismar, Louisiana, in addition to its Caojing facilities. MDI is an important precursor in the manufacture of polyurethanes – versatile polymers that are used in the automotive and construction industries, in appliances such as refrigerators, and in footwear.

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