Manufacturing News

BASF's new innovation campus in China to boost its creative capacity

BASF, a German multinational chemical company and the largest chemical producer in the world, said it will further build up its creative capacity in China.

BASF will construct an innovation campus phase 3 in Shanghai. That will further strengthen its research and development capabilities for advanced materials, systems and chemical engineering, and serve the needs of growing industries in the country.

"Over the past two decades, we have been continuously expanding our production and R&D footprints in China to serve the growing demand for high-quality products and innovative solutions. The investment is continuing with several big projects in the pipeline," said Stephan Kothrade, president and chairman of BASF Greater China.

"We are very looking forward to an increasing domestic demand in transportation, construction, aerospace, consumer goods, home and personal care products and even high-tech industries, such as electronics, in China, as the country has achieved strong business growth last year, becoming the second-largest market after the United States, with the strongest potential for growth."

The expansion, kicked off in April, is expected to be completed by the end of 2022, with total BASF investment in its Innovation Campus Shanghai by then to reach around 280 million euros ($336 million), said the company.

"As a company that has been doing business here for over 136 years, we want to be part of the growth and we are determined to continue accelerating our pace to further invest in the China market," he said.

BASF Greater China achieved strong business growth in 2020, with sales of approximately 8.5 billion euros ($10.4 billion) in 2020, accounting for 14 percent of the company's global sales. The performance in China is 16 percent higher compared with a year earlier, despite the very challenging macroeconomic situation, especially during the first half.

It estimated that China's share of global chemical production will increase to nearly 50 percent by 2030, and BASF wants to further strengthen its position as a preferred partner for customers in China and accelerate organic growth, said the German chemical giant.

China has become the main engine of world economic growth over the last few decades. Its economic development is also transitioning from a high-speed model to a high-quality model that emphasizes the mutual reinforcement of domestic and international markets, which BASF believes will provide more growth opportunities for the company to further leverage its knowledge and expertise to contribute to the long-term development of the Chinese market.

The ongoing energy transformation in China and its carbon neutrality pledge present opportunities as well as challenges for multinational corporations like BASF, and the company will continue investing to support Beijing's carbon neutrality ambitions, he said.

Analysts believe the expansion in Shanghai is in response to the bright prospects and rising demand within the country's chemical sector.

Tang Sisi, an analyst at research firm BloombergNEF, said China's carbon neutrality pledge and decarbonization goal in the country's energy industry present opportunities for multinational corporations, which have been stepping up efforts to align their core businesses with Chinese market demand.

In response to China's pledge of carbon neutrality by 2060, BASF will continue to collaborate with its local partners to drive sustainability, embrace digital transformation and contribute to China's green development by sharing technologies and experiences, Kothrade said.

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