Malaysian Prime Minister Dato' Sri Mohd Najib Tun Abdul Razak officiated at the groundbreaking of an integrated aroma ingredients complex, set up by BASF and PETRONAS Chemicals Group Berhad (PCG) via their joint venture company BASF PETRONAS Chemicals Sdn Bhd.
The complex, to be built within the existing site in Gebeng, which is jointly owned by BASF SE and PETRONAS Chemicals Group (PCG), will house a facility to produce citral and its precursors as well as associated downstream plants to manufacture citronellol and L-menthol
Also present at the ceremony were Pahang Menteri Besar, Dato' Sri Diraja Haji Adnan Haji Yaakob; Dr Martin Brudermüller; Vice Chairman of the Board of Executive Directors of BASF SE, responsible for Asia Pacific, and Chairman of PCG who is also PETRONAS Chief Operating Officer and Executive Vice President of Downstream Business, Datuk Wan Zulkiflee Wan Ariffin.
In his speech, Dato' Sri Najib said, "This project will benefit local people in Pahang through training and employment opportunities at all levels, as well as through positive economic impact and enhanced expertise in the sustainable operation of large scale projects like this one."
Dr Martin Brudermüller said, "Our investment in the integrated aroma ingredients complex in Kuantan is a perfect example of how we are implementing our long-term strategy in Asia Pacific: we are collaborating with our longstanding trusted partner, PETRONAS; we are introducing an innovative production technology for the first time into Asia Pacific; and we are making another important step towards our objective to achieve local production of 75% of the products we sell in Asia Pacific."
Datuk Wan Zulkiflee said, "The aroma ingredients to be produced by the Complex are highly attractive specialty products that are less susceptible to economic cycles experienced typically by the commodity chemicals market.
Saori Dubourg, President of BASF's Nutrition & Health division said, "With this investment, we will help meet the globally growing demand of customers for citral-based products, for example in the flavor and fragrance industry, especially in Asia Pacific."
BASF is the leading producer of citral-based products worldwide, with a portfolio that includes aroma ingredients, such as geraniol, citronellol, linalool and L-menthol, as well as vitamins and carotenoids. Aroma ingredients are sold to the flavor and fragrance industry, and are used mainly in home and personal care products and fine fragrances, as well as in the food industry and in pharmaceutical applications.
The MYR1.5 billion (approx. USD 500 million) complex will be developed in phases where the first plants of the complex are expected to come on-stream in 2016 and to create some 120 new employment opportunities.
Citral is nature-identical to the main component of many essential oils like 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.
Citronellol is used for a fresh, powerful, and long-lasting rose fragrance, and is an indispensable component for numerous fresh-floral compounds.
L-menthol is used for cool freshness in various products in oral care, body care, flavorings and in pharmaceutical applications
BASF and PCG founded their joint venture BASF PETRONAS Chemicals Sdn Bhd in 1997. BPC currently operates an integrated complex situated at the Gebeng Industrial Zone, Pahang, Kuantan. Its share capital is 60% held by BASF and 40% by PCG with a total initial investment of about MYR 3.4 billion for acrylic monomers, oxo products and butanediol production facilities. In the new project, the partners will invest proportionately to their respective stakes in BASF PETRONAS Chemicals Sdn Bhd.
