BASF and PETRONAS Chemicals to establish ingredients facility in Malaysia

Germany-based BASF and Malaysia-based PETRONAS Chemicals (PCG) have announced plans to establish an aroma ingredients facility at their existing joint venture site BASF PETRONAS Chemicals in Gebeng, Kuantan, Malaysia, with an investment of MYR1.5bn ($500m).

The expansion will help the partners meet increasing global demand in the flavour and fragrance industry, particularly in Asia Pacific.

The complex will feature a facility for citral and precursor plants.

In addition, the partners will invest in the production of aroma ingredients including a new plant for L-menthol and citronellol.

Production will be achieved in phases, with the first facility of the project expected to go onstream in 2016, creating about 110 new jobs.

PCG president and CEO Dr. Abd Hapiz Abdullah said that the Gebeng expansion will add further value creation to the company’s existing product streams, and that PCG is strengthening the joint venture by leveraging BASF’s technology and expertise in aroma ingredients.

PCG chairman Datuk Wan Zulkiflee Wan Ariffin said, "The integrated aroma chemicals complex will open up a new business frontier for PCG, tapping into the flavours, fragrance and pharmaceuticals markets."

Aroma ingredients are sold to the flavour and fragrance industry, and are used in home and personal care products as well as in food industry and pharmaceutical applications.

L-menthol is an ingredient used in various products in flavorings, oral care, body care and pharmaceutical applications, while Citronellol is used for a long-lasting rose fragrance and is a key component for numerous fresh-floral compounds.

Citral is the main component of many essential oils such as lemongrass, and is used as fresh-citrus and fruity notes in fragrances and flavours.

It is also used in the production of vitamins A and E and as precursor for aroma ingredients.

BASF and PCG established their joint venture BASF PETRONAS Chemicals in 1997 for the production of acrylic monomers, oxo products and butanediol.

The joint venture, in which BASF and PCG hold 60% and 40% stakes respectively, currently operates an integrated complex situated at the Gebeng Industrial Zone, Pahang.

In the new project, the companies will invest according to their stake.

BASF is a leading producer of aroma ingredients across the world, with a product range that includes geraniol, citronellol, linalool and L-menthol as well as chemicals, plastics, performance products, crop protection products, oil and gas.

PETRONAS Chemicals is a leading integrated chemicals producer in Malaysia and one of the largest in South-East Asia.

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Image: The new facility will produce aroma ingredients such as L-menthol. Photo courtesy of BASF.