BasfThe largest producer of chemicals in the world has long identified Asia, in particular China, as a critical engine for its growth strategy, taking advantage of the booming chemical market in the region and economic potential.
Strategic importance of Asia
Asia-Pacific, led by China, represents around 50% of the world market of chemicals and is expected to represent 70% by 2030, China leading more than half of world sales in the chemical industry and three-quarter production in production. Basf considers this as a central opportunity to expand its market share. BASF’s commitment to Asia began in 1885 with the trading of textile dyes and has since evolved to serve almost all key industries, including automotive, electronics, construction, agriculture and consumer goods.
BASF aims to considerably increase its sales in Asia-Pacific, targeting 25% of world sales by 2020 (21% in 2010) and double regional sales by 2020 compared to the 2012 levels (11.7 billion euros to 25 billion euros). Although specific targets after the afternoon is less detailed, the emphasis remains on the growth of the growth of regional chemical production. BASF invests 10 billion euros in a new verbund site integrated in Zhanjiang, Guangdongshould be his third largest worldwide by 2030.
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This site, designed for sustainability with 100% renewable electricity, targets rapid growth industries such as automobile and electronics in southern China, a region described as “completely sub-production”. Construction began in 2020, operational plants since 2022 (for example, engineering plastics and thermoplastic polyurethane). Basf extends its Verbund Nanjing site, a joint venture with Sinopec and strengthening its value chain of its battery through the BASF Shanshan joint venture.
BASF operates 27 subsidiaries in exclusive property and 30 production sites in Grand China, Shanghai welcoming its head office in China and an innovation campus. Investments include the Kuantan Verbund site in Malaysia, Singapore sites and a new chemical complex in Dahej, India, focusing on products like Diphenyl Diisocyanate (MDI). BASF also provides a second innovation campus in Mumbai.
From 2024 to 2027, 40% of the 19.5 billion euros in capital expenditure in BASF will target Asia-Pacific, emphasizing local production to meet customer demand. BASF aims to produce 75% of its sales in Asia-Pacific locally by 2020, improving competitiveness by reducing dependence on imports and aligning with the proximity of customers. Basf stimulates R&D in Asia, with two main hubs (Shanghai and Mumbai). It plans to have 25% of world R&D in the region by 2020, compared to 27% in 2012, focusing on areas such as battery materials, electronic materials and sustainable technologies. More than 900 R&D employees are already working in Asia-Pacific.
BASF integrates sustainability in its Asian operations, targeting net-zero emissions by 2050 and a 25% reduction in 1 and 2 emissions by 2030. Zhanjiang Site, propelled by renewable energies, and partnerships such as Mingyang Offshore Wind Farm joint venture underline this commitment. BASF is moving towards personalized products and functional materials, targeting 70% of sales from them by 2020, compared to 30% of conventional chemicals, to respond to market evolving demands.
BASF invests in the development of talents thanks to partnerships with universities and the Basf learning campus in Singapore, while improving operational efficiency by cost savings and capacity increases. Despite optimism, BASF recognizes slower growth in China and on mature Asian markets, with overcapacity in certain product lines. However, it sees long -term potential in the rebalancing economy of China, especially in the automotive and construction sectors.
BASF faces the increase in competition from multinational companies, belonging to the state and local in Asia, requiring continuous innovation and cost competitiveness. BASF performs complete risk assessments, considering geopolitical, environmental and social factors. He stresses that his investments in China do not create dependence or do not move European production but are strategic for global balance.
In 2023, BASF recorded 9.4 billion euros in sales in China alone, asia-Pacific significantly contributing to its world income of 68.9 billion euros. BASF expects the chemical production of Asia-Pacific to increase TCAC by 5.6% until 2020, exceeding the global average by 3.7% and plans to develop slightly above this rate.
Basf technology director, Stephan KothradeIt remains optimistic about the long -term growth of China, especially in Guangdong, and considers India as an emerging perspective. The company aims to capture market share in high growth industries while increasing the objectives of sustainability. While the aggressive investment of BASF in Asia, in particular China, positions it to capitalize on the domination of the chemical market in the region, the strategy is not without examination.
Asia’s account as a growth engine is convincing, but the emphasis on China raises questions about the release, in particular given geopolitical tensions and economic volatility. THE X Messages suggesting deindustrialisation in Germany due to Basf Asian pivot simplify the situation – BASF insists that it does not move but is developing to meet global demand. However, the closure of European installations and job cuts for fuel skepticism about the balance of its global strategy. The commitments of sustainability, such as the development of the renewable energies of Zhanjiang, are promising, but must be weighed with the classification of BASF as a superior polluter in the air and the water in 2020, which could undermine its environmental credibility if it is not discussed.
The strategy focused on BASF Asia is a calculated decision to draw on the largest and fastest chemical market in the world, with significant investments, localized production and an innovation stimulating its ambitions. However, competition navigation, economic changes and public perception in Europe will be essential to maintain its world leadership.
