Basf Korea to construct steam facility in Yeosu

Basf Korea is investing 600 billion won ($646 million) to add a steam production facility to its current Yeosu plant.
A subsidiary of the Germany-based global chemistry company Basf, the Korean company is planning to start building the add-on to its factory, which is located in Yeosu, a South Jeolla city, late this year with the goal of finishing the project around 2009.
The steam that will be provided from the new facility will be used as a source of energy in producing basic material for polyurethane. The facility is powered by coal, not oil. The company expects to reduce costs to its manufacturing, since it does not use oil, and oil prices have been rapidly increasing recently.
Diphenylmethane diisocyanate and toluene diisocyanate are the main products produced at the company’s Yeosu site. They are used in the automobile and construction industries. They are also used for making refrigerators, furniture and shoes.
Basf Korea was established in 1954 and employees 1,100. Its sales reached 2 trillion won last year.
While the company was announcing the opening of a new facility, it is closing down a factory in Gunsan, North Jeolla, which produced lysine, an amino acid found in proteins. It is the amino acid in all cereal grains. The company acquired the factory from Daesang for $600 million in 1998. Basf had been struggling with rising material prices and global oversupply.
Kwon Young-gil, lawmaker for the Democratic Labor Party claimed Tuesday that the closure leaves more than 270 people without jobs and hurts firms that do business with Basf.
“Basf had been receiving benefits from the government for 20 years,” said the lawmaker. “And it is just withdrawing. It is against business ethics.”

By Hwang Young-jin Staff Writer [yhwang@joongang.co.kr]