BASF Signs Letter of Intent to Supply Neopentyl Glycol to Zhejiang Guanghua Technology for Polyester Resin Plant

BASF has signed a letter of intent with Zhejiang Guanghua Technology Co., Ltd. ("Guanghua Technology"), a prominent Chinese polyester resin manufacturer, to supply new neopentyl glycol (NPG) produced at BASF's integrated site in Zhanjiang. This agreement marks an important milestone in the long-term partnership between the two companies.

Guanghua Technology plans to build a high-end polyester resin plant with an annual output of 100,000 tons for high-end powder coatings in the East China Sea area of Zhanjiang Economic and Technological Development Zone, where BASF is building a world-class NPG plant with an annual capacity of 80,000 tons.

"Our strategic decision to co-locate with Guanghua Technology in Zhanjiang is a key enabler to further strengthen our long-term partnership. We are confident that this strategic move will create synergies that will benefit both parties, including enhanced collaboration and stable supply, accelerated delivery, access to shared resources, and cost reductions. Additionally, this partnership will meet the growing demand for environmentally friendly powder coatings in China and the Asia Pacific region," said Vasilios Galanos, Senior Vice President of BASF's Intermediates division in the Asia Pacific region.

"We are looking forward to BASF's integrated site in Zhanjiang, especially as the site will set a new benchmark for the use of clean energy and energy saving in the petrochemical industry. We will leverage our strengths, rely on the world's leading NPG supplier, combine our strategic partnership with BASF, and take advantage of Zhanjiang's unique geographical location to expand our 100,000-ton polyester resin project with confidence, further contributing to VOC reduction and blue sky and white clouds," said Sun Jiefeng, Chairman of Guanghua Technology.

With the new NPG plant at the Zhanjiang integrated site expected to start production in the fourth quarter of 2025, BASF's global annual NPG capacity will increase from 255,000 tons to 335,000 tons, strengthening BASF's leading position among global NPG manufacturers. After Germany's Ludwigshafen, the United States' Freeport, and China's Nanjing and Jilin, the new plant at Zhanjiang will be BASF's fifth NPG plant.

NPG is a key intermediate for the production of powder coating resins, which has been particularly successful in applications for coatings in household appliances and construction industries. Due to the low content of volatile organic compounds (VOCs) in powder coatings, users can achieve VOC emission standards, and the release of VOCs can be reduced by up to 50% compared to liquid coatings. NPG is also used in the production of lubricants, plasticizers, and pharmaceuticals.