BASF Commits $780M To Complete Louisiana Chemical Plant Expansion

In Geismar, LA, BASF is moving forward with the final phase of an expansion project for for the methylene diphenyl diisocyanate (MDI) plant at its Verbund site. The $780 million investment will double production capacity at the company’s Ascension Parish chemical manufacturing complex.

The project marks the beginning of the third and final phase of an expansion plan the company announced in 2018. The first phase of the expansion project involving the construction of a new MDI synthesis unit was put in operation in October of 2020. The second phase, which started operations in 2021, expanded several existing upstream units. With the third and final expansion phase, which includes several new upstream units and a splitter, the new overall MDI output of the Geismar complex will increase to 600,000 metric tons.

Counting all three expansion phases and other site investments, New Jersey-based BASF will retain more than 1,000 existing jobs and add 37 new direct jobs with average annual salaries from $86,600 to $105,600 per year, plus benefits. Louisiana Economic Development (LED) estimates that the total project plan will result in 147 new indirect jobs, for a total of 184 new jobs in the Capital Region.

BASF Geismar Verbund site in Louisiana is located on the Mississippi River and produces chemicals that are vital to the sustainability of our economy and quality of life. Situated on 2,500 acres and including 22 production units, BASF Geismar is the largest BASF site in North America. (Source: BASF)

Upon completion, BASF’s Geismar Verbund site – signifying the physical integration of production, market platforms and technologies that tie the business together – will be able to produce 600,000 metric tons per year of MDI.

“This investment underlines our commitment to North America and strengthens BASF’s supply reliability and the competitiveness of our customers’ value chains in the region,” said Michael Heinz, Chairman and CEO, BASF Corporation. “As one of BASF’s Verbund sites, the Geismar location is ideally suited for the expansion of our MDI production thanks to its existing infrastructure, reliable raw material supply, skilled workforce and strong community support.”

Representing more than $1 billion in combined capital investment, the seven-year expansion project will allow BASF to meet growing North American demand for its products in construction, appliance, transportation, automotive and other sectors.

“Thanks to our strategic location and infrastructure, access to competitive raw materials, highly-skilled workforce and strong government support, BASF has now invested more than $2 billion in new projects and improvements at the Geismar site since 2009,” said Jerry Lebold, BASF’s Senior Vice President and General Manager at the Geismar site. “This continued investment demonstrates our commitment to our employees, our community and our presence in Louisiana which is more than 60 years strong.”

Construction will begin this year and is expected to be complete by mid-2025. The expanded facility will utilize leading-edge technology that combines the highest safety standards with advanced digitalization in its operations, the company said.

“BASF is one of the largest chemical companies in the world, and this substantial reinvestment in its Geismar complex speaks volumes about the strength of Louisiana’s advanced manufacturing sector,” said Governor John Bel Edwards. “By increasing production of a material vital to the creation of energy-efficient products, BASF has positioned our state as an important contributor to the global sustainability supply chain. That is a win for workers and their families in the Capital Region, and for the state’s economy as a whole.”

To secure the final phase of the BASF expansion project, Louisiana offered an incentive package that includes a $1 million Retention and 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.

“BASF continues to demonstrate its commitment to community by operating responsibly, hiring locally and donating time and resources to local programs and organizations,” said Kate MacArthur, president and CEO of the Ascension Economic Development Corp. “The company’s  commitment to sustainability and reliability in product line investments mirrors its efforts in community advancement.”

​​“We are fortunate to have BASF in the Capital Region and it’s very positive to see them continue to invest in Louisiana for production of more sustainable products,” said Adam Knapp, president and CEO of the Baton Rouge Area Chamber. “The company’s expansion capitalizes on the region’s skilled workforce and strong supply chain.”

ASH Industries Expands In Acadiana Region

Meanwhile in Lafayette Parish, ASH Industries will invest $5 million to expand its manufacturing facility. The project will create 85 new direct jobs with an average annual salary of $40,600 plus benefits, while retaining 67 jobs in Louisiana’s Acadiana Region. ASH is a custom molding manufacturer that produces specialized products ranging from surgical devices to laser light show components.

“ASH Industries is optimistic about the future of manufacturing in Louisiana and so far has launched phase one of a three-phase program to invest in jobs in our community,” said company President Hartie Spence. “The ingredients of economic development in our industry are manufacturing space, a solid employee base and the latest in cutting-edge manufacturing equipment. ASH’s current expansion will directly support and increase the services that we can provide customers who appreciate the benefits of having their products manufactured in our state.”

ASH will add new equipment including a chiller, a 125-foot expanse crane and water cooling equipment for machinery. The project will double the size of the company’s manufacturing floor, adding 20,000 square feet of workspace.

“The expansion of ASH Industries is an important job creation project for the skilled workforce in Lafayette,” said Gov. Edwards. “For more than 30 years, ASH has fostered a strong team, and is set to grow that team further – a testament to the opportunities available in Louisiana’s manufacturing industry.”

To secure ASH’s expansion in Lafayette, Louisiana offered the company a competitive incentive package that includes the LED FastStart workforce development program. The company is also expected to participate in the state’s Enterprise Zone and Industrial Tax Exemption programs.

“ASH Industries has consistently grown since opening its doors in Lafayette 31 years ago, and expanding its operations will lead to continued success for its employees, their families and our community,” said Lafayette Mayor-President Josh Guillory. “This multi-million-dollar investment will not only benefit ASH Industries but Lafayette as a whole by stimulating economic growth and creating competitive job opportunities.”

“Hartie Spence and ASH Industries are exemplary examples of the ingenuity and innovation found across Lafayette Parish and Acadiana,” said Lafayette Economic Development Authority president and CEO Mandi D. Mitchell. “We are appreciative of ASH Industries’ investment and continued growth in North Lafayette. The 85 jobs created by this expansion will provide quality employment opportunities for nearby residents in advanced manufacturing, which is one of LEDA’s target industries.”

Check out all the latest news related to Louisiana economic development, corporate relocation, corporate expansion and site selection.

Focused on site selection for rising industry sectors, Business Facilities’ inaugural LiveXchange Emerging Industries event will take place November 16-18, 2022 at Loews Sapphire Falls Resort at Universal Orlando.

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