BASF, one of the world's largest chemical companies, inaugurated a multi million-dollar polyurethane production complex in Shanghai yesterday, as the chemical giant tries to tap growing Chinese demand for the product.

The new facility will also house a regional polyurethane research and development center, as well as a system house and a thermoplastic polyurethane production site.

"The investment in this facility underlines our long-term commitment to China," said Martin Brudermuller, member of the board of executive directors responsible for BASF's Asia-Pacific business.

Related readings:  BASF opens new engineering plastics compounding plant  BASF, Sinopec to further invest

Brudermuller declined to reveal the specific investment in the new site, only saying it is "a double-digit million (dollar) project."

BASF announced last year that it is planning to invest $1 billion in the Asia-Pacific region through 2009, more than half of which will go to China.

The German chemical giant announced on Tuesday that it is planning to build a new chemical plant in Chongqing, in Southwest China.

The Chongqing factory, which is scheduled to kick off in 2010, will have annual capacity of 400,000 tons of crude MDI, or diphenylmethane diisocyanate, the raw material in polyurethane.

BASF would not reveal how much money would be invested in the proposed plant.

Brudermuller said the company is also considering expanding its capacity to sites "that are close to customers and where local and neighboring economies are dynamic, such as Tianjin in North China".

BASF and the US-based chemical company Huntsman, along with three Chinese partners, built a $1 billion complex in Shanghai last year to make isocyanates MDI and TDI or toluene diisocyanate, which is also a raw material for polyurethane.

The Shanghai complex has an annual capacity of 240,000 tons of crude MDI and 160,000 tons of TDI.