BASF to shutter German POM plant; transfer production to Korea

With over 70% of global demand for polyacetal (POM) resin derived from Asian countries, it makes sense to locate any new plant there, hence the decision by BASF to team up with South Korea’s Kolon Plastics to construct a 70,000-tonnes/year plant in Gimcheon, Korea.

The plant will be operated by the joint venture Kolon BASF innoPOM, Inc. Following the start-up of the new plant in Korea in the second half of 2018, BASF will discontinue production of POM in Ludwigshafen. The products from the new plant are to be marketed around the world separately by the two companies under their respective trade names and proprietary formulations.

The start of operation will create in total what’s described as the world’s largest complex for the production of POM by BASF. Kolon already produces POM at the site with a 57,000-tonnes/year polymerization plant and 50,000 tonnes/year of compounding capacity.

While the Gimcheon site is indeed massive, larger individual POM plants do exist already, headed by Celanese’s 140,000-tonnes/year behemoth in Frankfurt-Höchst commissioned in 2011 to replace an existing 110,000-tonnes/year facility that was decomissioned to make way for an expansion of Frankfurt Airport.

In addition, DuPont operates a 90,000-tonnes/year plant in Dordrecht, The Netherlands.

These massive plants are part of an effort for global players to remain competitive amidst an onslaught of new capacity in China, with many new plants utilizing coal gas as a feedstock. The largest plant currently operating in China is Yuntianhua’s 90,000-tonnes/year plant commissioned in 2010.

While Chinese POM plants typically run inefficiently and quality can be variable, they are producing enough POM material to capture much of the low end of the market such as that for fasteners. This has prompted global players to target higher added value segments of the market such as automotive. Case in point: Japan’s Polyplastics has developed metallic finish compounds that incorporate aluminum pigments for use in parts such as door handles. There are still concerns, however, that Chinese suppliers may up their ante and improve quality, thereby threatening mid-market applications.

Global POM production capacity grew from an estimated 750,000 tonnes/year 10 years ago to reach 1.7 million tonnes/year in 2015 according to Plastics Information Europe (PIE). Demand, meanwhile, more than doubled from the 600,000 tonnes of 10 years ago.

And even more capacity could be on the way in China according to PIE. ChemChina plans to bring on stream another 160,000 tonnes/year plant, and Datong Coal Mine Group plans for a large-scale petrochemical project including 240,000 tonnes/year of coal-based POM. These massive plants would place further pressure on the supply-demand balance.