Why did BASF close the Japanese BDO plant?

Recently, BASF of Germany announced that its joint venture with Idemitsu Kosan Co., Ltd., BASF Idemitsu Co., Ltd. (BIC), will close its 1,4-butanediol (BDO) plant in Chiba, Japan in December 2020. The joint venture agreement between BASF and Idemitsu Kosan will also be terminated.

BASF stated that the decision to close the BIC plant jointly with Idemitsu Kosan is part of BASF's global long-term selection assessment of assets in its BDO value chain. BIC has 21 employees, all of whom will be assigned to other jobs in Idemitsu Kosan or BASF Group in Japan.

Currently. BASF has BDO and its derivative production plants in Asia, North America and Europe. BASF said it will continue to provide BDO from its global plants to Japanese customers currently supplied by BIC.

BIC President Masaru Saitoh explained: “Due to the shrinking scale of the Japanese BDO market and the recent Asian investment in a number of new coal-based BDO production bases, resulting in serious overcapacity, the closure of the Chiba plant has become inevitable.”

BDO and its derivatives are important chemical raw materials for the production of engineering plastics, polyurethane, solvents and elastic spandex fibers. In recent years, as China has mastered the BDO production process, it has promoted the expansion of a single set of domestic BDO devices, most of which are coal-based routes. The industry is expanding rapidly and competition is becoming increasingly fierce, but the growth rate of downstream demand has lagged behind the growth rate of production capacity. BDO has serious overcapacity. There are still a large number of devices under construction in the future, and it is expected that the BDO market will remain surplus for a long period of time.