BASF, the largest diversified chemical company in the world, has substantially expanded its presence in the Middle East region by opening a state-of-the-art plant for customer specific antioxidant blends (CSB) in Bahrain, which is the company’s largest CSB producing facility in the world.

CSBs are key additives for the production of polymers for the plastics industry, especially for the Middle East region. The plastics industry in the Gulf Cooperation Council (GCC) countries is currently clocking two-digit growth, which is a very high one, says Frank Fasdernes, BASF business management director, plastic additives, Eastern Europe, Africa and Western Asia, in an exclusive interview with Gulf Industry.

Plastic additives increase the thermal stability of the polymeric materials. Antioxidants prevent oxidation which degrades the colour, appearance and performance of plastics.

Antioxidation also increases stability of the phenoxy radical, thus reducing the chain reactions that occur during heating polymers in the presence of oxygen.

“The plant will produce a wide range of plastic additives which will be mainly supplied to the (GCC),” he says.

“BASF being a market leader in CSBs decided to be in the region in sizeable capacity seeing demand and therefore set up the plant in Bahrain. This new plant has come in addition to the existing manufacturing agreement for CSBs with Astra Polymer in Saudi Arabia, making BASF the largest CSB supplier in this region.

The new CSBs plant at the Bahrain International Investment Park

“This facility will be well positioned to serve the fast growing polymer market in the Middle East with special focus on key customers in the countries of the GCC, one of the fastest growing regions for the production of polyolefin resins worldwide,” he says.

The plant in Saudi Arabia has been running over several years very successfully. “Since we have a very strong increase in demand, we decided to add another capacity in Bahrain. But the technology here is different,” he explains.

“It is the latest patented technology of BASF that we have brought here. Similar BASF plants are already running in Asia and Europe. But here, we have invested in an advanced technology and it is also for BASF the biggest quantity-wise producing plant in the world.” Construction of the new facility had started in September 2011.

“We are very happy to establish a state-of-the-art CSB production site close to our customers in this fast growing region. This is backed by our powerful production network of antioxidants in Asia, Europe and the Americas making us worldwide one of the leading partners to the plastic processing industry with a product portfolio unmatched in terms of diversity and quality. BASF is very much committed to further strengthen its plastic additives business ranging from antioxidants and light stabilisers to pigments,” he says. 

“The expected growth of the plastic polymer production in the Middle East will get an additional push by increasing efforts to grow the plastics downstream market locally. We will top up such growth with technical solutions and flexible supply patterns which are only possible as a local supplier,” he says. “It will also help us to deliver high-quality products tailor-made to the demand of the industry. Furthermore, the proximity to our main customers will ensure a flexible and reliable supply.”

PRODUCTS AND MARKETS
The plant’s portfolio includes antioxidants, effect pigments, organic and inorganic pigments, process stabilisers, ultraviolet light stabilisers and other additives. It will start with 60-70 per cent capacity ulilisation and eventually ramp up as demand increases, he says.

The plastics additives blending plant occupies 15,000 sq m on a greenfield site at the Bahrain International Investment Park. The development included construction of two production lines housed in a production building and a central operation building. The two lines will provide flexibility of production. Bahraini companies did the construction work while the equipment parts came from Europe.

The plant has been fully automated and incorporated with the latest technologies of BASF. The project also includes construction of associated infrastructure and utilities. The entire plant complies with modern environmental standards.

The plant will be the most economical and qualitative as regards technology, Fasdernes says. “We know the quality we need to produce, even the customers know that. Also we know the form of the product we have to produce. We can produce all forms that are required, giving us the flexibility to respond to customer demand. Definitely, our latest technology will ensure that we advance into a new generation of production. In short, it will be the most automated plant,” he says.

Dr Fakhro (third left) with dignitaries and officials at the opening

The plant has been designed to cater for expansion. “We will look into all possibilities, but it is too early to comment on Phase 2 expansion. However, we see robust growth,” he says.

“The main raw materials will be sourced from our own antioxidant production in Asia and Europe. These will form the core of our CSBs. We would also use third-party materials which are specified and qualified by our customers in Asia, Europe and the US,” he says.

Regarding marketing, he says the plant was built to cater to the GCC countries, but there are possibilities to grow into the Commonwealth of Independent States (CIS) and African markets.

“We see that the demand we are forecasting will ensure high utilisation at the plant. We are already thinking ahead and are very confident that it was the right choice to come into the middle of the GCC countries and be stronger. We were already a local supplier and producer. But with this plant we can cater to the other GCC countries.

“Our target markets are mainly Saudi Arabia and the UAE followed by Qatar, Kuwait and Oman. In terms of sales we will be able to grow slightly above the market, which is actually difficult considering our already high market share. With the wide range of products and technology at our disposal, we have a very good base to grow,” he says.

“For distribution, we are setting up an integrated production hub for the Middle East. The distribution network will use the BASF network, which has its own trained people to look after it. CSBs are tailor-made products on customer recipes and you have much more flexibility in supply if your production base is close by. You are the faster in your response and faster in your delivery even as customers get more demanding, with quantities becoming higher over time.”

The plant has the highest standards of safety. Its ISO certification will take place in January. So far there has not been an accident during the construction phase. There will be no compromise on safety and quality, he asserts.

Regarding environmental standards at the plant, Harald Kroll, managing director of BASF UAE, who also attended the interview, says the plant uses a process that will have no waste gas or wastewater. No solid waste will be used for landfilling. All of that will be sent back to the suppliers or incineration plants outside Bahrain.

“For a start, the facility will have 70 per cent of its staff Bahraini. We have had excellent cooperation from Tamkeen and the Economic Development Board. The local employees have been sent to Europe for training,” says Kroll.

Asked why BASF chose Bahrain to set up the plant, he says: “Bahrain has provided us all the parameters we were looking for including favourable geographical location, favourable infrastructure, good business climate and competent labour.”

The plant was opened by Dr Hassan Fakhro, Bahrain’s Minister for Industry and Commerce, Michael Heinz, member of BASF’s board of executive directors, and Sabine Taufmann, German ambassador to Bahrain. Vivian Jamal, business development director of the Bahrain Economic Development Board, and senior BASF officials were present.