BASF, the world's leading chemical company, has outlined its Strategy 2020 for Asia Pacific, with the aim to grow on average two-percent faster than the Asia Pacific chemical market each year through 2020.

 

With expected market growth of four to five percent per year, this would double regional sales by 2020 while earning a premium on cost of capital.

 

This ambitious strategy is based on growth and new business initiatives. Under its new strategy, BASF will initially target five key growth industries in the region, will increase headcount by at least 5,000 from a current figure of approximately 15,000, and plans to generate 70 percent of regional sales from local production. At the same time, the company plans to invest EUR2 billion between 2009 and 2013, and aims to create efficiency improvements that are expected to save at least EUR100 million annually by 2012.

 

''BASF has established its position as the leading chemical company owing to its long-standing commitment to the Asia Pacific region. The Asian growth markets will continue to provide attractive opportunities, and our Strategy 2020 will help us to realise them,'' said Dr. Martin Brudermueller, Member of the Board of Executive Directors of BASF SE, responsible for Asia Pacific. ''The current economic situation does not change our positive expectations of the long-term potential of these dynamic markets.''

 

The EUR2 billion investment includes BASF's 50 percent share of the EUR$1.4 billion expansion of its integrated chemical production joint venture in Nanjing, China, which was approved by the national government in July 2009. This investment will help support BASF's goal of producing 70 percent of its sales within the Asia Pacific region.

 

In Chongqing, China, BASF is in the planning phase for a 400,000 tonne/year plant for MDI, a precursor for polyurethanes. BASF and Chongqing authorities aim for mechanical completion of the plant by the end of 2013 and commercial operation by early 2014. Final approvals of the project by Chinese regulators are expected in 2009, and subsequently the BASF Board of Executive Directors plans to approve the investment in the first quarter of 2010.

 

Cost reductions of at least EUR100 million annually by 2012 will help increase the efficiency of the company's existing operations.

 

An important aspect of this effort is the company's Site Optimisation Project, which aims to increase capacity through debottlenecking production and by exploiting technical synergies, for example in production processes or across sites. All measures implemented under this project are expected to recoup their costs within one year.

 

Site optimisation in Asia Pacific is ongoing at the company's integrated production sites in Kuantan, Malaysia, and Nanjing, China, as well as in Yeosu, Korea and other production sites in the region.

 

BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics and performance products to agricultural products, fine chemicals as well as oil and gas.