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The two leading chemical companies, BASF and Huntsman, have recently announced the separation plan of their joint venture in Shanghai Lianheng Isocyanate Co. (SLIC). SLIC is the production unit of diphenylmethane (MDI) established by the cooperation of BASF, Huntsman, and Chinese companies, including Shanghai Hua Yi, Sinopec Shanghai Gaoqiao Petrochemical Co., and Shanghai Chlor-Alkali Chemical Co.

Under this new agreement, one of the MDI plants will be handled by Huntsman in cooperation with Shanghai Chlor-Alkali Chemical Co., while BASF will take over the other plant with Shanghai Hua Yi and Sinopec Shanghai Gaoqiao Petrochemical Co.

Ramkumar Dhruva, President of the Monomers division of BASF, stated that the establishment of this joint venture, SLIC played a crucial role in the production of MDI in China. Furthermore, he also expressed his enthusiasm for their future developments in MDI operations along with their partners Shanghai Hua Yi and Sinopec Shanghai Gaoqiao Petrochemical Co. The company is aiming to meet the growing demand for MDI more efficiently.

According to Tony Hankins, Huntsman Polyurethanes' President, the company's partnership with Shanghai Chlor-Alkali Chemical Co. has facilitated the establishment of a successful polyurethanes business in China. This achievement has become possible due to their continuous production of crude MDI for almost 20 years. The company is confident that, along with its partners, it will be able to meet the growing needs of its customers by integrating these assets into its downstream operations.

The new arrangement states that the initial MDI plant, which was established in 2006, will be operated by Huntsman and Shanghai Chlor-Alkali Chemical Co. Moreover, they will also drive the recycling unit of hydrogen chloride, which was added in 2018 to produce a precursor of MDI. On the other hand, BASF will own and operate the second MDI plant that was added in 2018. This unit includes the manufacturing plants for aniline and nitrobenzene, which are both precursors for MDI. All current employees involved in the Joint Venture will be transferred to their respective new organizations.

According to Procurement Resource, BASF, Huntsman, Shanghai Hua Yi, Sinopec Shanghai Gaoqiao Petrochemical Co., and Shanghai Chlor-Alkali Chemical Co. are planning to operate the MDI unit separately. According to this new arrangement, Huntsman will operate one of the MDI manufacturing units with Shanghai Chlor-Alkali Chemical Co., while BASF will handle the other unit with Shanghai Hua Yi and Sinopec Shanghai Gaoqiao Petrochemical Co.