BASF has spent EUR2.5m (US$3.5m) at its Demarchi coatings site, located in the state of São Paulo, Brazil, to expand its capacity to supply the local automotive industry with waterborne paint.

The goal is to meet market demands generated by new car makers setting up their plants in the country and by the trend of using waterborne technology rather than solvent-borne. BASF claims to be the pioneer in developing waterborne base coats for the automotive industry and says he technology is eco-efficient because water replaces most of the organic solvents.

In addition to traditional customers such as GM, Volkswagen, Fiat and PSA, plus truck makers, BASF has in past years won new supply contracts which include car makers such as Hyundai and Chery.

In South America, BASF has two auto paint plants - one in Demarchi, Brazil, and the other in Buenos Aires, Argentina.