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BASF and JV Partner To Invest $500M in Aromas Ingredients Plants in Malaysia

Posted: April 25, 2013

In a move to better serve customers in the flavor and fragrance industry, especially in Asia Pacific, BASF and Petronas Chemicals Group Berhad (PCG) intend to invest $500 million (MYR 1.5 billion) in an integrated aroma ingredients project at their existing joint venture site BASF Petronas Chemicals in Gebeng, Kuantan.

At the heart of the complex will be a plant for citral and precursor plants. The partners will also invest in downstream production for aroma ingredients including a new world-scale plant for L-menthol and a plant for citronellol. Production will be developed in phases, with the first plants of the project operational in 2016, creating some 110 new employment opportunities.

“This investment is built on the solid, long-term relationship with our strategic partner PCG. Since the establishment of our joint venture, BASF and PCG have successfully served the needs of the region with high-quality and innovative products,” said Martin Brudermüller, vice chairman of the board of executive directors of BASF SE, responsible for Asia Pacific. “With this strategic investment we are increasing our contribution to the aroma ingredients market to bring attractive fragrances and flavors to our daily lives." 

Datuk Wan Zulkiflee Wan Ariffin, chairman of Petronas Chemicals Group Berhad, added: “The integrated aroma chemicals complex will open up a new business frontier for PCG, tapping into the flavors, fragrance and pharmaceuticals markets. This indeed presents exciting prospects for the company, as we endeavor to provide innovative customer solutions." 

BASF and PCG founded their joint venture BASF Petronas Chemicals Sdn Bhd in 1997. The company currently operates an integrated complex situated at the Gebeng Industrial Zone, Pahang. The company’s share capital is 60% held by BASF and 40% by PCG with a total initial investment of about MYR 3.4 billion for acrylic monomers, oxo products and butanediol production facilities. In the new project, the partners will invest according to their stake.