Sinopec and BASF are to go ahead with a US$1.4bn expansion of their 50-50 joint venture in Nanjing. The investment includes expanding BASF-YPC’s existing steam cracker and three plants as well as constructing 10 new chemical plants. The expansion will become operational by 2011, according to the Chinese partner.

The initial cost of the project was put at US$900m but has since been increased due to higher construction costs, exchange-rate impacts and plans for additional capacity.

The extension will allow the complex to produce chemicals for a range of industrial sectors including construction, electronics, pharmaceuticals and automobiles. Despite the global recession, BASF expects Chinese demand for chemicals to grow 6.5-7 per cent a year until 2020.

Yangzi-BASF Styrenics, another Nanjing-based joint venture between the two partners, is being merged into BASF-YPC. This company produces styrene monomer, polystyrene and expandable polystyrene.

Founded in 2000 with a total first phase investment of US$2.9bn, BASF-YPC started commercial production in 2005.