BASF To Restart New TDI Unit
Plant Delays Damage BASF
Many prominent people were in attendance when chemical giant BASF opened its new plant for the production of TDI, used to make polyurethane foam, in November 2015. Malu Dreyer, the governor of Rhineland Palatinate, where the plant is located, said that the state’s largest employer “stands for German cutting-edge technology.”
Economics Minister Sigmar Gabriel also praised the company for what he characterized as a “promising event.” And BASF Chief Executive Officer Kurt Bock touted the DAX-listed company’s largest single project, which cost more than €1 billion ($1.06 billion), as one of the most competitive plants in the world.
But it seems that the rave reviews were premature. To this day, the TDI plant has hardly progressed beyond a brief trial operation period, with technical problems repeatedly causing delays and shutdowns. The plant has been completely out of commission since November 2016, following an unplanned leak of dangerous phosgene gas, an intermediate product arising during TDI production, in a safety chamber.
On Wednesday, BASF was forced to announce that although operations will begin again at the plant in the coming weeks, its projected annual production output of 300,000 tons of TDI, known fully as toluene diisocyanate, is unlikely to be attained until 2018.
BASF has suffered a further setback at its Ludwigshafen plant which makes materials for soft foams used in mattresses and car seats, saying a technical defect in a new reactor would reduce output into next year.
Production downtimes often raise global prices of the material, known as TDI, and BASF’s glitch might give a boost to competitors such as Bayer’s Covestro, Wanhua, Mitsui and Dow Chemical.
With 780,000 t in annual capacity of TDI, BASF is the largest supplier in the market. BASF has spent more than $1.1 billion on the Ludwigshafen complex, or roughly 20 percent of its annual investment budget for plant and equipment.
The German chemicals group had to stop production at the 300,000-tpy complex at the end of November 2016 because of a damaged reactor.
Production with a smaller backup reactor will be restarted at reduced rates in the next few weeks, BASF said on Wednesday, followed by intermittent shutdowns, but it will take until some time next year for the replacement reactor to be delivered and fully ramped up.
Covestro, for its part, had to reduce output of precursor chemicals for both rigid and soft foams for almost three months late last year due to a supplier’s outages.
In a statement BASF said: “Due to the long delivery time for the new reactor, BASF expects the final repair work to be completed in 2018. The supply to customers is secured via BASF’s global TDI production network.”
Due to unforeseen complexities, BASF had previously been struggling to fully ramp up production at the TDI facility at Ludwigshafen, which was inaugurated in November 2015.