BASF, the worldÔÇÖs largest chemical company, has announced it will invest Ôé¼2 billion in China and other areas of Asia over the next four years.
The move by the Ludwigshafen, Germany-based firm is designed to double sales in the Asia-Pacific region by 2020, and reflects the regionÔÇÖs growing demand for chemicals as industries such as car manufacturing and construction expand there.
BASF has said it believes the Asia-Pacific chemical market could grow to Ôé¼1.15 trillion by 2020 from Ôé¼650 billion last year. It also said it thought the region would account for almost half of all chemical sales worldwide.
Around 45 per cent of BASFÔÇÖs current Asia-Pacific sales come from China, where the company employs just under 14,000 people. Last year, Asia-Pacific contributed Ôé¼9.3 billion to BASFÔÇÖs total sales of Ôé¼62.3 billion.
The company predicts it will add an extra 5,000 personnel to its Asia-Pacific workforce by 2020. It currently has a presence in 15 countries in the region, including China, Japan, Korea and Malaysia.
ÔÇ£The Asian growth markets will continue to provide attractive opportunities, and our Strategy 2020 will help us to realise them,ÔÇØ said Dr. Martin Bruderm├╝ller, executive director for Asia Pacific, BASF.
ÔÇ£The current economic situation does not change our positive expectations of the long-term potential of these dynamic markets.ÔÇØ
Around Ôé¼957 million of BASFÔÇÖs new investment is to go towards expanding its chemical production joint venture with Chinese state-owned Sinopec in Nanjing
BASF is also planning a plant in Chongqing, central China, to make the chemical MDI, which is used in insulation foams found in cars and buildings.
The company also hopes to expand in emerging markets such as Vietnam, as well as inland provinces of China, which are beginning to benefit from new state development incentives.
In addition to the planned investments, BASF also said it would reduce costs by Ôé¼100 million per year by 2012, through measures aimed at increasing efficiency at its existing plants.
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