BASF sets out billion-dollar plan
By Wang Ying (China Daily)
Updated: 2006-05-23 09:49
Germany-based BASF, one of the global leaders in the chemical industry, plans
to invest 1 billion euros (US$1.27 billion) in the Asian market by 2009, with
much of the cash expected to come to China.
China is BASF's third-largest
market after Germany and the United States and attracted about 2 billion euros
(US$2.54 billion) from the company between 2001 and 2005, said Martin
Brudermueller, a member of BASF's board of executive directors who is
responsible for the company's Asian business.
"We will invest another
billion (euros) by 2009 in Asia," Brudermueller added.
He declined to give a
detailed breakdown of what would be spent in each particular country, but said
China would see a "very big share."
"China is a rising giant in the
petrochemical industry worldwide, and we have a long-term commitment to the
regional market," he said.
With the new investment in Asia, the company
aims to achieve around 10 per cent of its global sales and earnings in China for
the chemical business by 2010, compared with 6 per cent last year.
In
2005, BASF posted revenue of about 2.8 billion euros (US$3.56 billion) in China,
a record 43 per cent up from the previous year.
Robust growth last year
was attributed to the start-up operation of the company's ethylene cracker
(production plant) in East China's Jiangsu Province, its largest single
investment in its 140-year history, Brudermueller explained.
For this
year, the sales increase is expected to be about 20 per cent, about the average
annual rise of recent years.
BASF and Asia's biggest oil refiner Sinopec
last September announced the formal operation of their 50-50 petrochemical
plant, also called the Verbund site, in Nanjing, the capital city of
Jiangsu.
With a combined investment of US$2.9 billion, Verbund has the
capacity to produce about 1.7 million tons of petrochemical products, including
ethylene, each year from its 10 chemical complexes.
Sinopec and BASF
last year said they planned to expand the Verbund joint-venture by as much as 25
per cent to meet surging demand.
But Brudermueller said the German
chemical giant is still negotiating with its partner Sinopec and hasn't
finalized the deal.
"I cannot tell you any more about this," the BASF
official yesterday told reporters in Beijing. But the expansion would remain
unchanged at a 25 per cent increase, he added.
He also said soaring crude
oil prices have had a negative impact on some downstream businesses, but its oil
and gas sectors in Europe would help prevent damage to the overall
portfolio.
The company aims to increase local manufacturing facilities in
China to supply more than 70 per cent of sales, compared with 34 per cent last
year.
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