Germany-based BASF and Malaysia-based PETRONAS Chemicals (PCG) plan to establish an aroma ingredients facility at their existing joint venture site BASF PETRONAS Chemicals in Gebeng, Kuantan, Malaysia with an investment of MYR1.5bn ($500m).
The investment will help the partners meet the increasing demands in the flavor and fragrance industry, especially in Asia Pacific. The site expansion is expected to create 110 new jobs.
The complex will feature a facility for citral and precursor plants.
The partners will invest in production of aroma ingredients including a new plant for L-menthol and citronellol. Production will be started in phases, with the first plants of the project scheduled to go onstream in 2016.
L-menthol is as an ingredient used in various products in flavorings, oral care, body care, and pharmaceutical applications.
Citral is the main component of oils such as lemongrass, and is used as fresh-citrus and fruity notes in fragrances and flavors. It is also used in the production of vitamins A and E and as precursor for aroma ingredients. Aroma ingredients are sold to the flavor and fragrance industry, and are used primarily in home and personal care products and fine fragrances, as well as in the food industry and in pharmaceutical applications.
PETRONAS Chemicals chairman Datuk Wan Zulkiflee Wan Ariffin said, "The integrated aroma chemicals complex will open up a new business frontier for PCG, tapping into the flavors, fragrance and pharmaceuticals markets."
BASF SE, responsible for Asia Pacific, board of executive directors vice chairman Martin Brudermüller said this investment is built on the solid, long-term relationship with our strategic partner PCG.
"Since the establishment of our joint venture, BASF and PCG have successfully served the needs of the region with high-quality and innovative products," Brudermüller added.
BASF and PCG established their joint venture BASF PETRONAS Chemicals in 1997.
BASF is a leading producer of aroma ingredients across the world, with a product range that includes geraniol, citronellol, linalool and L-menthol. PETRONAS Chemicals is a leading integrated chemicals producer in Malaysia and one of the largest in South East Asia.
