BASF will spend $150 million to expand its chemical complex in Geismar in what the company said is the first step in an effort to double production of a product used to make construction, insulation, automotive and packaging goods.
The methylene diphenyl diisocyanate expansion will create 15 new direct jobs, with an average annual salary of more than $86,600, plus benefits. Louisiana Economic Development estimates the work will create 70 indirect jobs. The work will support 180 construction jobs at its peak.
Construction of this first phase is set to begin in the spring and projected to be completed by the end of 2020.
BASF currently produces 300,000 metric tons of MDI a year. The product is used to make polyurethane foams. The goal is to double production to 600,000 metric tons. Tom Yura, senior vice president and general manager of the Geismar plant, said the first stage would be "a very strong step" toward reaching that goal, but declined to give a specific figure for how much production will be added.
If the current worldwide demand for MDI holds steady and financial markets are unchanged, then Yura estimates the production could be doubled by the mid-2020s.
"If we want to meet those needs, then expanding in Geismar is the right way to do it," he said.
Since 2009, Yura said BASF has spent more than $700 million on capital construction in Ascension Parish, on projects such as adding plants to produce surfactants and formic acid and blend polyurethane, along with regular maintenance work. This work has added between 136 to 150 jobs at the plant. BASF has nearly 1,200 full-time employees at the Geismar facility and another 500 to 600 contract workers.
"The nice thing is this is good, steady growth," he said. "We've made about one of these announcements of a new plant just about every year."
BASF started talking to the state economic development agency in late 2016 about expanding MDI production. The state is offering a range of incentives for the project, including a $1.65 million Modernization Tax Credit, which will be claimed over five years. BASF also is expected to use Louisiana’s industrial tax exemption and Quality Jobs programs.