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November 25, 2019

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BASF reveals largest-ever project in China

German chemical giant BASF SE on Saturday officially launched its largest-ever investment project in China, with investment estimated to reach up to US$10 billion upon completion.

Located in the city of Zhanjiang in Guangdong Province, the BASF smart Verbund project will initially include plants to produce engineering plastics and TPU serving a range of key industries.

As the first wholly foreign-funded project in China’s heavy chemical industry, the Verbund project, with the first-stage units expected to come on stream in 2022, is a demonstration of the chemical behemoth’s ambition to expand further into China, the world’s largest market for chemical products.

Sparse population

Donghai Island, in the eastern bay of the Leizhou Peninsula at the southernmost tip of the Chinese mainland, was once a remote and unknown island in the South China Sea. The 286-square-kilometer island only has a population of 270,000 inhabitants. Yet the island has been chosen as the bearer of BASF’s ambition to step further into China and Asia.

In the next decade, BASF will build an integrated site with a 9-square-kilometer area. The site will include steam cracking units with an annual production capacity of 1 million tons of ethylene and more than 30 production units that offer consumer market-oriented products and solutions.

These units are concentrated in downstream industries such as petroleum refining byproducts, chemical products and chemical byproducts.

BASF has been deeply involved in the Chinese market for many years. In 2018, BASF sold products worth more than 7.3 billion euros (US$8 billion)to customers in China and had more than 9,000 employees in the region.

The Verbund site in Zhanjiang will be BASF’s third production site worldwide, following Ludwigshafen in Germany and Antwerp in Belgium. The new capacity will enable BASF to meet the growing demand of its customers, particularly in the automotive, electronics and new energy vehicles industries.

“Zhanjiang is a perfect location for BASF to further strengthen our footprint of local production in China,” said Dr Stephan Kothrade, president of Asia Pacific functions and president and chairman of Greater China at BASF.

“By utilizing the latest digital technologies and applying the highest safety standards, the new Verbund site will be a role model for sustainable production contributing to the development of a circular economy in China,” said Dr Martin Brudermuller, chairman of the board of executive directors of BASF.

China has vowed to keep its door open even wider amid rising trade protectionism. Policies to ease market access, strengthen intellectual property protection and expand imports have been promulgated.

Guangdong, which has always been at the vanguard of the reform, is among the top choices for foreign businesses to tap into the Chinese market. The province has also strengthened intellectual property protection by setting up an intellectual property court and an intellectual property protection center.

From January to October this year, Guangdong approved the establishment of 12,000 foreign direct investment enterprises, with the actual utilization of foreign capital reaching 130.25 billion yuan.


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