BASF and Sinopec today began the construction for the expansion of their joint venture, BASF-YPC Co., Ltd. (BYC). BASF and Sinopec plan to jointly invest approximately $1.4 billion in technologies to produce downstream chemical intermediates and specialties for the Chinese market.

The BASF-YPC ethylene project jointly invested by BASF and Sinopec is one of the largest petrochemical joint ventures in China. With a total investment of $2.9 billion in the first phase, the site started commercial production in June 2005. Riding on the success, the two parties decided to make a further joint investment in site expansion in order to maximize the advantages of the joint ethylene project, creating an extended value chain and increasing the production of specialities. On July 1, 2009 the Chinese central government approved the Joint Feasibility Study Report for the expansion of BYC.

In this second phase of construction, the capacity of the steam cracker will be expanded from 600,000 tons/year to 740,000 tons/year of ethylene, 10 new chemical plants including a 2-propylheptanol plant, a non-ionic surfactants plant, an amines complex will be constructed in addition to the expansion of three existing plants. The products will serve multiple industries such as agriculture, construction, electronics, pharmaceutical, automotive and chemical manufacturing.

Liang Baohua, head of the Jiangsu Committee of the Communist Party of China (CPC) and head of the standing committee of Jiangsu provincial people's congress, Luo Zhijun, Governor of Jiangsu Province, Zhu Shanlu, head of the Nanjing Committee of CPC and member of the provincial standing committee of CPC, Shi Heping, Vice Governor of Jiangsu Province, Dai Houliang, Member of Board of Directors and Senior Vice President of China Petroleum & Chemical Corporation (Sinopec), Dr. Martin Brudermueller, member of the Board of Executive Directors of BASF SE, together with other distinguished guests, jointly laid the foundation stone for the BYC expansion.

Mr. Dai Houliang said, "The BASF-YPC joint venture symbolizes the great partnership between Sinopec and BASF, both among the world’s top 500 companies. Sinopec will continue to follow what we believe in, complementing each other, maintaining long-term collaboration and achieving synergies. We together with BASF will support the development of the joint venture and facilitate the construction and operation of the expansion in an effort to make BYC one of the most competitive production sites in China's petrochemical industry. We believe, as long as we can both fully utilize our own strengths, the scope of our partnership will become even wider."

Brudermueller said, "The products made here ultimately contribute to the modernization and sustainable development of the Jiangsu Region and China overall. With this expansion, we are putting a greater focus on specialty goods. These products are actually closely related to our daily life, especially in reducing overall energy use and creating a cleaner environment."

The expansion of BYC is expected to be operational from 2011 onwards. The new plants will produce a variety of materials that go into products for daily life, such as those for personal hygiene, including shower gels, shampoos, detergents, as well as for construction, like pipes, floorings and windows.