Petronas Chemicals Group Bhd (PChem) and German chemicals giant BASF are investing US$500mil (RM1.5bil) in an integrated aroma ingredients production facility in Gebeng, Kuantan, expanding on an existing joint venture (JV) there.
The project, which is subject to a final investment decision by the board of PChem before the end of the year, will be executed on a 60:40 basis between BASF, the world’s largest chemicals maker, and PChem.
Both companies already have a JV in the form of BASF-Petronas Chemicals Sdn Bhd, which operates a complex in Gebeng, Kuantan, that produces acrylic monomers, oxo products and butanediol, also on a 60:40 basis.
PChem said in a statement to the stock exchange yesterday that the new aroma ingredients plant would enable the firm to meet growing global demand in the flavour and fragrance industry, especially in Asia.
The proposed complex will comprise a plant for citral and the precursor plants, which will be integrated with PChem and BASF’s facilities in Gebeng.
They will also invest in downstream production for aroma ingredients, including a new world-scale plant for L-menthol and a plant for citronellol.
To be developed in phases, the first plant will be operational by 2016, creating some 110 new employment opportunities.
“The integrated aroma chemicals complex would open up a new business frontier for PChem, tapping into the flavours, fragrance and pharmaceutical markets.
“This indeed presents exciting prospects for the company, as we endeavour to provide innovative customer solutions,” PChem chairman Datuk Wan Zulkiflee Wan Ariffin said.
“The Gebeng expansion adds further value creation to our existing product streams, and we are strengthening the JV by leveraging on our strategic partner’s technology and expertise in the aroma ingredients,” president/CEO Dr Abd Hapiz Abdullah said.
BASF is one of the leading producers of aroma ingredients worldwide, with a product range that includes geraniol, citronellol, linalool and L-menthol.
Aroma ingredients are sold to the flavour and fragrance industry and used mainly in home and personal care products and fine fragrances, as well as in the food industry.