Solutia Inc. (SOA), a manufacturer of performance materials and specialty chemicals, announced Tuesday it plans to expand its diphenyl oxide production capacity at its operation in Chocolate Bayou, Texas.

The expansion, intended to increase production by more than 30% by early 2012, is a response to the increase demand for diphenyl oxide across a variety of markets, including the fast growing concentrating solar power market.

"This project is a key part of the growth strategy for Specialty Fluids and marks the latest step in our investment plan for this business," said Rich Altice, vice president, business management for Solutia's Technical Specialties division.

Diphenyl oxide DPO is a raw material used in the production of many industrial products including surfactants, flame retardants, fragrances, chemical intermediates and heat transfer liquids. It is a key component in the production of Therminol, the preferred heat transfer fluid of the solar industry.