BASF Plans Second South America Biodiesel Chemical Plant by 2014

BASF SE, the world’s biggest chemical company, may start building its second factory in South America for sodium methylate, a catalyst used for biodiesel production within two years.

The plant will probably be built in Brazil or Argentina where biodiesel consumption is mandated by law, said Kerstin Dunnwald, head of business management for inorganic chemicals at Ludwigshafen, Germany-based BASF.

South American countries are seeking to cut their dependence on fossil fuel imports by mixing diesel with fuel derived from crops, creating markets for companies that supply ingredients necessary for its manufacture.

“This market will grow with increasing fuel demand,” Dunnwald said in a telephone interview yesterday. “There are discussions of increasing existing blends.”

The project may be similar in size to a 60,000-metric ton a year plant the company started operating late last year in Brazil’s southeastern municipality of Guaratingueta, she said.

Argentina mixes 7 percent of its conventional diesel with biodiesel while Brazil mixes 5 percent, BASF said Feb. 6 in a statement.

The two countries are among the world’s top four producers of the renewable fuel, Dunnwald said.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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