BASF SE and China-based Highsun Holding Group (HSCC) have signed a non-binding memorandum of understanding to explore combining their European polyamide 6 (PA6) value chain operations in a 50:50 joint venture. The companies are also evaluating whether to include their global extrusion activities outside North America.

The proposed venture would exclude both companies’ engineering plastics downstream businesses. Project teams have been established to assess the potential combination, but no final agreement has been announced.

BASF said the potential partnership would bring together selected complementary assets, technologies and commercial capabilities to improve asset utilization and reduce costs. BASF CEO Markus Kamieth said consolidation could help European chemical producers strengthen their competitiveness amid challenging industry conditions.

BASF operates PA6 and precursor production assets in Ludwigshafen, Germany; Antwerp, Belgium; Caojing, China; and Freeport, Texas. HSCC, headquartered in Fuzhou, China, produces caprolactam and operates 31 manufacturing centers in China and Europe, according to the announcement. Caprolactam is a key precursor for PA6.

The companies have not disclosed which facilities or production capacities could be included in the potential venture, or provided a timeline for completing their evaluation.

The discussions follow other recent BASF capacity and investment developments. In September, the company said it was conducting an advanced feasibility study for a potential methylene diphenyl diisocyanate (MDI) production complex at its Dahej site in Gujarat, India. BASF has secured land for the project, but a final investment decision remains subject to the study and required approvals.