Britain's Imperial Chemical Industries (ICI) and Germany's BASF are to enter into a rare partnership to build a US$650 million chemicals plant near Shanghai. ICI, acting through a 75-25 per cent joint venture with Japan's Nippon Polyurethane, has teamed up with the mainland's Huaye Group, while BASF has brought in Sinopec. A spokesman for ICI said he hoped production of the 160,000 tonne plant would start in about five years, principally making methyl die-isocyanate, the raw material used for the manufacture of polyurethane. The chemical is used for a wide variety of purposes, such as shoe soles and car seats. The new plant will further cement ICI's strategy of making the mainland the centrepiece of its Asian expansion. The decision to act together with BASF, which is usually seen as the group's principal rival in other markets in the world, came after BASF's application to construct a similar plant in one of the southern provinces was rejected. It is understood Beijing authorities signalled that the group might be better placed if it tied up its application with ICI. The move came about a week after ICI - Britain's largest chemicals company - held its board meeting in Shanghai for the first time in its history, and opened a new $40 million paints plant. ICI expects to spend about GBP100 million (about HK$1.26 billion) in its contribution to the new plant, and alongside BASF will be majority partners. It is also planning further investments in the mainland, adding up to $50 million in the shape of a paints plant and a surfactants facility, which will produce emulsifiers for face creams and other personal care products. The spokesman said ICI believed that despite the Asian financial crisis, the basic fundamentals of the region were healthy and the company could not afford to slow down its investment in the region.