BASF, Idemitsu joint venture to cease BDO business operations in Japan

BASF Idemitsu Co., Ltd. (“BIC”), a joint venture between BASF SE (“BASF”) and Idemitsu Kosan Co., Ltd. (“IKC”), will be closing its 1,4-Butanediol (“BDO”) plant at Chiba, Japan in December 2020. The joint venture agreement between BASF and IKC will be terminated thereafter.

The BIC joint venture was formed in 2003, with BASF owning a 67% stake and Idemitsu a 33% share. The plant, which has a production capacity of 25,000 metric tons/year, is integrated into Idemitsu’s petrochemical production complex at Chiba.

BASF’s decision to close the BIC plant in mutual agreement with IKC is part of an ongoing global review of long-term options conducted by BASF for its assets in the BDO value chain. The BIC plant employs 21 people and everyone will be offered alternative employment at IKC or BASF Group in Japan.

With production plants in Asia, North America, and Europe for BDO and its derivatives, BASF will continue to offer BDO from its global sites to customers in Japan currently supplied from BIC.

“As one of the leading companies in the business with BDO and derivatives, we will continue to support our customers on a global basis with our high-quality products. The recent measure is part of our strategy to ensure that we further improve our competitiveness in the markets where we add long-term value to both our customers’ businesses and to BASF,” said Vasilios Galanos, Senior Vice President, Intermediates Asia Pacific, BASF.

BDO is an organic compound predominantly used as a solvent in industrial cleaners and glue removers such as tetrahydrofuran (THF). BDO is a saturated carbon-4 straight-chain dibasic alcohol. It is a colorless and almost odorless viscous liquid at room temperature. It is an important intermediate chemical for tetrahydrofuran and polytetramethylene ether glycol (PTMEG), polybutylene terephthalate (PBT), gamma-butyrolactone (GBL), polyurethane (PU), and other solvents. These chemicals are widely used in fibers, engineering plastics, medicines, cosmetics, artificial leather, pesticides, plasticizers, hardener, solvent and rust remover, etc. Tetrahydrofuran is the largest application market for BDO which has occupied the largest chunk of the BDO market.

“The closure of the Chiba plant has become inevitable due to a declining BDO market size in Japan and significant overcapacities in Asia due to recent investments into new coal-based BDO production sites,” explained Masaru Saitoh, President, BIC. BIC is reaching out to all customers to support a smooth transition.