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Lead Feature

10th year in business for Malaysian compounding plant
German chemicals company BASF recently celebrated the 10th anniversary of its engineering plastics compounding plant in Malaysia. The company has invested more than US$1 million over the past decade into the world-scale plant, located down south in Pasir Gudang, Johore, which produces polyamide (PA) and polybutylene terephthalate (PBT) engineering resins for the automotive, electrical/electronics and household markets in Asia.

PRA spoke to Hermann Althoff, BASF’s Group Vice-President of Engineering Plastics in Asia Pacific on the milestones achieved by the plant to date, including product developments with the latest being a PA6 resin to replace brass in water meter housings.

PRA: What are the achievements of the plant?

Althoff: Commissioned in 1999, this was the first engineering plastics compounding plant that BASF built in Asia, underlining our strategic commitment to engineering plastics and our long-term focus on Asia Pacific as the fastest growing region.

This plant has thrived and achieved great success over the last ten years. It has received excellent audit ratings conducted by global customers like Toyota and Bosch and remains an efficient and cost competitive production base.

In fact, after establishing this plant we set up other plants that were modelled along the lines of this one in South Korea (18,000 tonnes/year), China (45,000 tonnes/year) and India (9,000 tonnes/year).

PRA: What has the investment of US$1 million been used for?

Althoff: In the past ten years, BASF has invested money to recruit and train staff for the plant, which employs 100 people. Malaysian experts from this plant were also sent to China and India to train staff at the new plants in those countries.

PRA: What is the volume produced at the plant and the countries it targets? Are there any expansion plans?

Althoff: BASF’s total engineering plastics compounding capacity in Asia is 100,000 tonnes/year. Of this 45,000 tonnes/year comes from the Pasir Gudang facility, making it one of the largest in Asia. The plant has been experiencing year-on-year double digit growth since it was set up and we expect this to continue based on the strong growth in the automotive sector.

Of the amount produced, two-thirds is for PA6 and PA66 materials while one-third is for PBT.

The capacity was increased in 2005 and there are no plans to expand it further in the immediate future, since we have set up plants in other countries and we are producing the right products with the available capacities.

Almost 90% of the output is exported, especially to Japan, which accounts for 60% of the exports, and to China, South Korea and the ASEAN markets.

PRA: What are the features of the plant?

Althoff: One of the highlights of the plant is that it uses modular technology. Usually for a high volume plant, it will be housed in a four-storey building but we changed the footprint here to a one-storey building, resulting in cost and space savings.

The plant also has state-of-the-art extruders and is certified in accordance to the ISO14001 environmental standard.

PRA: What are the recent additions to the plant?

Althoff: In 2007, the plant was further strengthened with the addition of a product development centre. This technical facility focuses on the development of engineering plastics suited to specific market requirements in Asia.
            Since 2007, we have developed 45 new products and 30 of these have been commercialised to date, mainly for the automotive and electrical/electronics markets.
            The advantage of the Pasir Gudang facility is its proximity to Singapore, where there is a team of R&D experts as well.

PRA: What types of products have been innovated at this plant?

Althoff: Successful product developments include engineering plastics for direct metallised headlamp bezels, air intake manifolds as well as various products with special properties for the electronics industry.

In the direct metallising method used on headlamps, cost reductions are possible as it cuts out the coating step since a high gloss surface quality is produced. This resin is exported to South Korea and Japan since there are a number of headlamp manufacturers in these countries.

We have also produced an injection moulding PA6 grade that is used for water meter housings. This is a metal replacement part where 30-50% cost reductions are possible compared to using brass. As well, there is no machining involved and no scrap produced and the material is UV-stabilised for external use. It also fulfills all government regulations in Asian countries and at the moment we are exporting this material to China, South Korea and Indonesia. As for Malaysia, we are working with local water meter manufacturers to attain the local compliances.

Another new product is the Ultramid (high speed) range of products that uses nanotechnology to allow for high flow capabilities.

We also supply kitchenware (food contact) grades and recently launched a series of products that require approval steps aligned to GMP.

Though the products are exported to countries where we have plants we also transfer the recipes to the respective facilities.

PRA: In the light of the recent global downturn and its effect on the automotive sector, how has the business fared?

Althoff: Surprisingly, the automotive sector in Asia has been doing well and has not been that much affected by the downturn. We see the Asian market surpassing the markets in developed countries. In this respect, we see a lot of potential for our products.

In the downturn, we supported our customers without reducing our capacity in Asia. Also, in the fourth quarter of last year and in the first quarter of this year, which were especially difficult for the industry, BASF still kept its development projects going because we did not want to delay projects and the product development work. In fact, none of our customers in the automotive sector cancelled any of their development projects, which were especially focused on providing more fuel-efficient cars.

PRA: How do you view the engineering plastics market in Asia?

Althoff: Since less than 5 kg of PA is used in cars in Asia, compared to 25 kg used in Europe, there is further potential for growth of the engineering resins market. Over the next ten years, the prospects are good as the automotive market is expected to grow and the migration of plastics into new areas of a car still needs to be developed further.

PRA: Are there any plans to set up more compounding plants in Asia?

Althoff: The footprint is quite complete, especially with the set up of the most recent plant in Mumbai, India.  There is also enough space available at this plant for expansion in the future.

 

 
 
 
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