(AFP) Prime Minister Dr Mahathir Mohamad today launched a RM3.42 billion integrated chemical complex, which officials said would make Malaysia a regional petrochemical hub.

Germany's BASF AG holds a 60-percent stake in the giant complex comprising 12 plants in Gebeng, Pahang while Malaysian national oil company Petronas owns 40 percent.

Mahathir said more than RM19 billion dollars worth of investments were being planned for various petrochemical projects over the next few years, half of which would come from foreign direct investment.

He said at the launch that petrochemical projects have generated significant inflow of foreign investments into the country and boosted export earnings.

In a statement, Petronas said the total investment for the 150-hectare complex would be about RM3.42 billion. Most of the plants have come onstream, with the rest to start by the fourth quarter next year.

It said the combined production capacity of the plants would be more than one million tonnes annually and about 80 percent would be exported to Asia-Pacific countries.

The raw materials are used to produce high quality end-products such as plastics, adhesives, paints, automobile, textiles and leather.

Regional hub

Petronas president and chief executive Mohamad Hassan Marican said the complex would make Malaysia a regional petrochemical hub and spur industrial development on the east coast of peninsular Malaysia.

"The chemicals produced by this complex will help ensure the security of supply of feedstocks in the domestic market to support the growth of further downstream manufacturing activities which will lead to the greater diversification of Malaysia's industrial base," he said.

However BASF executive director Helmut Becks said the outlook for the coming year would be bleak amid a prolonged global downturn following September 11 terror attacks in the United States.

"It's very very difficult to give a clear picture of what the end of the year will be but definitely this second half of the year is difficult and the next year will be difficult as well," he told reporters.