BASF's Super New Plant in Guangdong, China Will Determine Its Future

The new "Integrated Production Complex" of German chemical giant BASF, built in Zhanjiang, Guangdong Province, China, officially commenced operations on Thursday. The new integrated complex spans approximately four square kilometers and will employ around 2,000 people in the future. This plant will determine BASF’s future.

According to a report by Germany’s ARD television: BASF held an opening ceremony for the new facility in Zhanjiang on Thursday. As a horn sounded, senior executives from BASF and local officials from Guangdong entered the venue and took their seats on white ceremonial chairs. A grandstand and stage were set up in front of the factory, where multiple representatives from the Chinese government welcomed this major foreign investment project. Attendees included the Party Secretary of Guangdong Province, who were greeted upon entry by a traditional lion dance performance—symbolizing good fortune and prosperity.

BASF CEO Markus Knebel stated at the opening ceremony: “This is the proudest moment of my career.” Chinese Minister of Commerce delivered a video speech, calling the project “the largest single investment by a German company in China” and “one of China’s most important foreign-invested projects.” BASF invested nearly €9 billion in this project—the largest single investment in the company’s history.

Federal Minister for Economic Affairs of Germany, Katharina Reiche, also delivered a video address, emphasizing Germany’s high regard for establishing stable, predictable economic relations with China: “Especially during turbulent and uncertain times, our cooperation holds particular significance.” This project also underscores the close ties between Germany’s key industries and China’s economy—despite ongoing debates about over-reliance on China.

The new integrated production base in Zhanjiang will shape the future of this German chemical giant. Not only is China the world’s largest chemical market, but currently about half of global chemical production already comes from China, a share that continues to rise. Those who cannot participate in this growth risk losing their position in global competition.

Currently, around 14% of BASF’s global revenue comes from China, a proportion expected to increase further. With the Chinese market continuously expanding, the company aims to capitalize on this growth. Knebel said that half of the world’s chemical demand originates from China, adding, “The future is here.”

This new plant marks BASF’s third-largest integrated production site after Ludwigshafen (its headquarters) and Antwerp. Equipped with modern facilities and its own deep-water port, the complex can source raw materials globally. Products are primarily supplied to the domestic Chinese market, while exports mainly target Southeast Asia. Its core strategy is clear: “Produce in China, for China.” The site produces basic and specialty chemicals essential for industries such as automotive and plastics. Additionally, the facility achieves “green production” by using 100% renewable energy.

Meanwhile, while BASF expands in China, it is contracting in Germany. At its loss-making headquarters in Ludwigshafen, some production units have been shut down, and the company has launched multiple cost-cutting and workforce reduction initiatives. Last year alone, over 1,000 jobs were eliminated at the site.

Knebel argues this is not contradictory: “If BASF does not invest in China, it will become weaker—and a weaker BASF would not serve Germany well either.” He emphasized that the company continues investing in Europe, especially in Ludwigshafen, to enhance modernization and sustainability.

Increasing investments are also flowing into research and development, aimed at driving innovation in China to keep pace with intensifying domestic competition.

For Knebel, the balance is clear: “Imagine what BASF would be like without access to half of the global market—China.” He believes that “decoupling” from China poses a greater risk.

Source: rfi

Original article: toutiao.com/article/1860969620426883/

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