Gov. John Bel Edwards and BASF Senior Vice President Tom Yura announced the company will invest in the development of its methylene diphenyl diisocyanate, or MDI, capacity at its Louisiana chemical complex in Geismar. BASF plans to expand the production of MDI from 300,000 metric tons to almost 600,000 metric tons. MDI is used by customers to produce polyurethane foams and related materials for construction, insulation, automotive and packaging goods.
The complete expansion would take place over a period of several years in phases. In the first phase, BASF will make an initial investment of over $150 million in the construction of an MDI synthesis unit, with further production units planned for later phases. Construction will start this spring.
Through the investment, BASF will create 15 new direct jobs with an average annual salary of more than $86,600, plus benefits. Louisiana Economic Development estimates the expansion will result in an additional 70 new indirect jobs, for a total of 85 new jobs in the Capital Region. BASF will retain 1,100 existing BASF jobs in Geismar, where company operations also support over 400 contractor jobs.
“Louisiana excels in chemical manufacturing because of our outstanding infrastructure, a great business climate and a manufacturing workforce that leads the U.S. in productivity,” Gov. John Bel Edwards said. “We’re proud that BASF is choosing to reinvest in its Geismar complex, which is one of the biggest economic drivers in Louisiana and one of the leading sources of highly skilled manufacturing jobs. Ascension Parish and the Capital Region of Louisiana will be major beneficiaries of this important modernization project.”
“This new plant further strengthens our position as a leading supplier of chemistry for sustainable solutions,” said Yura, who also serves as general manager of the Geismar site. “This investment also demonstrates our strong commitment to our employees, our community and our presence in Louisiana.”
In the past decade, BASF has invested more than $800 million in major capital projects in Ascension Parish. The MDI modernization project will generate 180 construction jobs at peak activity, with the company expecting to complete the project by the end of 2020.
“The investment that BASF is making in their Ascension Parish site is further proof that Ascension is a great place to do business,” Ascension Parish President Kenny Matassa said. “In addition to the jobs they provide and the tax revenue they generate, they have given back to the community through support and sponsorships. BASF has always been a great corporate citizen.”
LED engaged BASF in discussions about the potential project prior to the company’s beginning engineering analysis in the fourth quarter of 2016. To secure the BASF project, the State of Louisiana offered a competitive incentive package that includes a $1.65 million Modernization Tax Credit, to be claimed in equal installments over five years. BASF also is expected to utilize Louisiana’s Industrial Tax Exemption and Quality Jobs programs.
“AEDC has been very fortunate to have a great relationship with BASF and we are proud of the economic impact BASF has on our community,” said President and CEO Kate MacArthur of the Ascension Economic Development Corporation. “Manufacturing jobs are the backbone of our parish, and we appreciate the continued investment BASF is willing to make in the Geismar facility and the quality employment opportunities that the investment creates.”
“BASF has been a long-standing presence in the state, and a long-standing partner in the Baton Rouge area,” said President and CEO Adam Knapp of the Baton Rouge Area Chamber. “This expansion will eventually double their production of energy-efficient MDI, while providing new direct and indirect jobs for the region.”