BASF and Petronas Chemicals Group Berhad (PCG) have announced plans to build a polyisobutene production plant at the site of their existing joint venture in the Malaysian state of Pahang.

The two companies said on Tuesday that the plant, the first of its kind in South East Asia, will have a total annual capacity of 50,000 metric tons of highly reactive polyisobutene (HR-PIB).

HR-PIB is an intermediate product used in the manufacturing of high performance fuel and lubricant additives, including additives for sludge prevention.

In addition to the new plant, BASF operates production facilities for HR-PIB at its Verbund sites in Ludwigshafen, Germany, and Antwerp, Belgium, and as part of a joint venture with Sinopec YPC in Nanjing, China.

Its joint venture in Malaysia, BASF Petronas Chemicals, operates an integrated complex at the Gebeng Industrial Zone, Kuantan, Pahang.

The jointly owned business is also building two other plants at the Kuantan site: an integrated aroma ingredients complex for the manufacturing of citronellol and L-menthol as well as citral and its precursors, which are widely used in the flavor and fragrance industry; and a production plant for the manufacturing of 2-ethylhexanoic acid (2-EHA) compound for the production of synthetic lubricants and oil additives.

The investment announced this week “marks another significant milestone in the development of the Kuantan site as a leading specialty chemicals hub in the Asia Pacific region, in line with PCG’s strategy to diversify into specialty chemicals and solutions,” said Datuk Sazali Hamzah, president and CEO of Petronas Chemicals Group Berhad.

The new plant is expected to start production in the fourth quarter of 2017.