Basf to invest US$720mn in new Camaçari plant

Friday, August 19, 2011

German chemical giant Basf (NYSE: BF) plans to invest more than 500mn euros (US$720mn) in a production site for acrylic acid, butyl acrylate and superabsorbent polymers (SAP) at the Camaçari industrial pole in Brazil's Bahia state.

The plant, which will be the first acrylic acid and superabsorbents facility in South America, will supply raw materials for products such as superabsorbents for diapers, acrylic resins for coatings, textiles and adhesives as well as products for civil construction.

The investment will be the largest made by Basf in South America, the firm said in a release.

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Basf has signed an agreement for the complex with Brazilian petrochemical company Braskem (NYSE: BAK) that entails long-term supply of propylene, which is used as feedstock for acrylic acid production, as well as the supply of utilities by Braskem to Basf.

Construction of the acrylic acid complex is due to start in 2011, with production slated to begin in the fourth quarter of 2014.

"This project reinforces the importance of the region for Basf, ensuring the supply of our products to our customers in South America and contributing to the development of the country," said Dr Alfred Hackenberger, president of Basf South America.

The company expects the investment to contribute some US$300mn/y to Brazil's trade balance, including US$200mn through reducing imports and US$100mn through increasing exports, Hackenberger added.

Basf also plans to build a plant to produce 2-ethyl-hexyl acrylate, a raw material for the adhesives and special coatings industries, at its existing chemical complex in Guaratinguetá, São Paulo. The facility will be the first for this product in South America, and operations are due to kick off in 2015, using the acrylic acid produced in Camaçari.