BASF opens largest-ever China plant amid overcapacity concerns
BASF inaugurated Thursday its massive Verbund integrated chemical complex in Zhanjiang, Guangdong province, southern China the company's biggest single investment in 160 years at 8.7 billion euros across four square kilometers employing over 2,000. Launch timing shadows short-term profitability amid industry overcapacity and weak margins. CEO Markus Kamieth told Frankfurter Allgemeine Sonntagszeitung pre-ceremony that returns will fall short of initial expectations.
Kamieth defended the move at the opening, telling attendees Zhanjiang exemplifies chemistry's future: efficient, digital and sustainable by design. Third-largest BASF site after Ludwigshafen in Germany and Antwerp in Belgium, it produces basic chemicals, intermediates and specialties for transport, electronics and consumer goods, mostly for Chinese clients. China accounts for half global chemical demand but only 14% of BASF sales; Kamieth told Handelsblatt China offers top growth, with renewables and green tech as major opportunities. He expects China share to hit 15-20% as the site ramps.
Germany voices criticism as BASF cuts Ludwigshafen jobs and plans shifting Berlin admin functions to India. Shareholders warn of over-reliance risks, citing costly Russian operations writedowns. Announced 2018 and built from 2020, the site's steamcracker the world's first with main compressors fully on renewable electricity started production early January on time and under budget. Kamieth told Xinhua in February he anticipates profits next year and a thriving site medium-term.
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