Petronas and BASF have signed a memorandum of understanding to undertake a joint feasibility study on building a specialty chemicals plant in Malaysia.
Petroliam Nasional Bhd (Petronas) and Germany's BASF are looking at jointly investing some RM4 billion to build a specialty chemicals plant of world-scale production capacity in Malaysia.
In a statement posted on its website, BASF said the two parties will evaluate the technical, commercial and economic viability of jointly owning and operating the world-scale facilities for the production of specialty chemicals, including non-ionic surfactants, methanesulfonic acid and iso-nonanol.
"The final scope of the investments will be determined following the outcome of the joint feasibility study, which is targeted to be completed in 2011," BASF said.
At the signing, Petronas was representend by its executive vice president of downstream business Datuk Wan Zulkiflee Wan Ariffin and vice president of downstream operations Kamaruddin Zakaria, while BASF was represented by its executive director responsible for Asia Pacific Dr Martin Brudermuller and Asia Pacific president Saori Duborg.
Commenting on the initiative, Wan Zulkiflee, who is also chairman of recently listed Petronas Chemicals Group Bhd, said the development of a new specialty chemical products portfolio is an important component of Petronas' plan to expand its downstream petrochemical business as part of its strategy to be a key player in the region as well as to spur domestic investments in the oil, gas and petrochemical industries.
Brudermuller said with the rapid growth of chemical markets in Asia Pacific, BASF is further expanding its specialty chemical business.
"Our joint venture with Petronas, based on a long-standing and successful partnership, is an excellent, well-established and competitive production platform in Asia.
By expanding our local production base in Malaysia, we can further improve our ability to supply our customers in Asia, from Asia,” he said.
BASF said based on its Asia Pacific strategy 2020, the company intends to produce 70 per cent of Asia Pacific sales in the region, with investments of about e2 billion (RM8.38 billion) between 2009 and 2013.
“The proposed move by Petronas and BASF will build on their successful strategic partnership in the country, established in 1997,” it said.
The partnership, via BAS Petronas Chemicals Sdn Bhd, of which BASF owns a 60 per cent stake, currently own and operate an integrated complex in Gebeng, Pahang, that produces acrylic monomers, oxo products and butane-
diol.
As for the subsequent phase of the collaboration, Petronas Chemicals Group and BASF will jointly evaluate outcome of the joint feasibility study and will adopt it as part of their strategic growth plans, if technically and commercially viable.
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