BASF opens new plant for vitamin production

- Last updated on GMT

Related tags: Vitamin c, Cost, Vitamins

The world's number two vitamin maker BASF opened a new production
plant for the chemical citral yesterday, the key building block for
vitamins A and E, as well as the carotenoids beta-carotene and
canthaxanthin.

The plant in Ludwigshafen, which has an annual capacity of 40,000 metric tons, replaces an existing 10,000 ton plant, and will lead to rising capacities in vitamins A and E.

A BASF​ spokesman declined to comment on current output of these vitamins but the firm said demand for fine chemicals is expected to grow by about 6 per cent on average by 2010, driven by growing incomes in threshold and developing countries and increasing health awareness.

The new plant is also designed to reduce production costs and ease increasing pressure on margins brought by vitamin and chemicals suppliers in Asia and emerging markets.

Growth in fine chemicals sales at BASF during the first half of this year has been entirely eroded by prices and currency costs. "Vitamin prices remained unsatisfactory overall, in particular in view of rising prices for raw materials,"​ said the company during its second quarter announcement.

Vitamin C prices for the European producers have however stabilised at a higher level than last year, after contracts were negotiated with key customers, improving margins in this product.

The startup of the new citral plant has also impacted first half earnings but is one of the key projects in a €300 million investment programme for fine chemicals at the Ludwigshafen site, designed to bring long-term savings.

BASF began using citral synthesis in 1981 and has increased production of the chemical over the years. The new plant is said to be "many times larger than that of the next largest competitor"​. It uses the first continuous process for citral and subsequent production stages based on process steps and catalyst systems developed by the German firm to simplify production and reduce production costs of fine chemicals.

"The new citral plant not only offers a guarantee that we can reliably supply our customers with the products they require, but also marks an important step toward ensuring our competitiveness,"​ said Martin Laudenbach, head of BASF's fine chemicals division.

DSM is also installing new technology at its vitamin E plant in Sisseln, Switzerland, to improve its cost structure.

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