BASF to Launch Second Phase of MDI Production Facility in Louisiana
BATON ROUGE, La. — Today, Gov. John Bel Edwards and BASF Senior Vice President Stefan Doerr announced the company will proceed with the second phase of its production expansion for methylene diphenyl diisocyanate, or MDI, at its Louisiana chemical complex in Geismar. BASF expects to double its production of MDI, from 300,000 metric tons to around 600,000 metric tons, through the multiphase expansion project announced in January 2018.
Details were shared in a press release.
MDI is used by industrial customers to produce polyurethanes, which contribute to improved insulation for appliances, lighter materials for cars and energy efficiency in buildings.
BASF will make an $87 million capital investment to continue the expansion of the MDI plant that has been a central aspect of its Geismar manufacturing facility for more than 30 years. The company committed $150 million to the first phase of the MDI expansion. That project is expected to be finalized in the first half of 2020. The second phase of the project will retain 1,238 existing BASF jobs at Geismar, the company’s largest manufacturing site in North America. Construction is expected to start by the end of 2019 with completion scheduled for 2021. The company estimates the project will support 170 construction jobs.
“BASF has called Louisiana home for more than 60 years, and this latest expansion at its Geismar plant will help to keep the company competitive in its global marketplace,” Gov. Edwards said. “From low operational costs to effective infrastructure and logistics, Louisiana provides industries across a broad spectrum of manufacturing specialties with the assets they need to succeed. We welcome this latest expansion at BASF’s Geismar facility and look forward to the continued economic impact of company operations for Ascension Parish and the Capital Region.”
BASF is a major player in the polyurethanes industry, operating a global production network of MDI facilities in China, South Korea, Belgium and the U.S.
“With the development of the American market, BASF needs this investment to support the growth of our existing customers,” said Doerr, head of BASF’s Regional Business Unit Monomers in North America. “The Geismar site is ideally suited for this investment thanks to the existing infrastructure, competitive raw materials and favorable business support from state and local governments. This investment also demonstrates our strong commitment to our employees, our community and our presence in Louisiana.”
Since 2009, BASF has invested more than $800 million in major capital projects in Ascension Parish. For this expansion project, the company is expected to utilize the state’s Industrial Tax Exemption Program.
“BASF continues to prove its commitment to our community and local workforce by investing and creating a partnership of long-term economic growth,” Ascension Parish President Kenny Matassa said.
“Ascension Parish remains an ideal place for chemical manufacturing, and we are thrilled that BASF continues to choose the Geismar facility as a place to grow and thrive,” said President and CEO Kate MacArthur of the Ascension Economic Development Corp.
“Today’s expansion announcement is welcome news for the Capital Region, and speaks to BASF’s confidence in the future of our economy,” said President and CEO Adam Knapp of the Baton Rouge Area Chamber. “Strong partnerships from the local to state level are important in creating business friendly environments, and we commend our allies at Ascension Economic Development Corporation for assisting BASF through the process.”