BASF SE EXPLORES AVENUES FOR BOOSTING INVESTMENT IN MALAYSIA

PUTRAJAYA, March 29 (Bernama) –- German-based BASF SE, which is operating an
integrated petrochemicals complex in Gebeng, near Kuantan, is exploring avenues
to further boost its investment in Malaysia.

The matter was discussed during a courtesy call by a BASF SE delegation,
headed by a member of the Board of Executive Directors, Dr Martin Brudermuller,
on Prime Minister Najib Razak at the Prime Minister's Office here
today .

A statement from the Prime Minister’s office following the courtesy call
said other members of the delegation were the president BASF Asia Pacific, Saori
Dubourg as well as the managing director of BASF PETRONAS Chemicals Sdn Bhd, Dr
Hermann Brandt.

They were accompanied by Petronas president Shamsul Azhar Abbas and the
executive vice president of downstream business, Petronas, Wan Zulkiflee Wan
Ariffin.

The statement said BASF and Petronas signed a memorandum of understanding
(MoU) on Dec 6 last year to undertake a joint feasibility study to produce
specialty chemicals in Gebeng, Pahang state, and elsewhere in Malaysia in a move
that would extend the two parties’ existing collaboration in the country.

"The partners are considering a potential joint investment sum of RM4
billion (US$1.33 billion) and upon completion, the joint venture is expected to
employ some 500 skilled staff," it added.

Under the terms of the MoU, the two parties will evaluate the technical,
commercial and economic viability of jointly owning and operating world-scale
facilities for the production of propylene and butylene based specialty
chemicals.

"The study will also look into the expansion of existing facilities in
Gebeng and the production of a new product called Super Absorbent Polymer (SAP),
which is largely used in personal hygiene applications," the statement said.

The statement said the final scope of the investments will be determined
following the outcome of the joint feasibility study which is targeted to be
completed in the fourth quarter of 2011.

"The project will generate spin off industries which in turn will create
further employment opportunities," it added.

The statement said that as substantial quantities of these specialty
chemicals will be exported, it is anticipated to generate significant export
revenue for the country.

The proposed collaboration by Petronas and BASF will build on their
successful strategic partnership in the country, established in 1997.

The partnership, via BASF PETRONAS Chemicals Sdn Bhd of which BASF owns a 60
per cent stake, currently owns and operates the integrated petrochemicals
complex in Gebeng, that produces acrylic monomers, oxo products and butanediol.