(Yicai Global) July 10 -- BASF will invest USD10 billion in a factory in China's southern Guangdong province, representing the German chemicals giant's largest ever investment globally.

BASF Chairman Martin Brudermüller and Guangdong's Executive Vice Governor have signed a non-binding agreement for the investment, state-backed Chinese news site The Paper reported today.

The facility will become the Ludwigshafen-based company's third largest integrated production site upon completion in 2030. The firm will begin installing equipment in 2026. 

The project's first phase includes a steam cracker with an annual capacity of one million tons of ethylene. BASF will build more downstream equipment in follow-up phases to provide products and solutions for industries such as transportation and consumer goods.

With a population of more than 110 million and a network of densely distributed industrial customers, Guangdong represents a key market in China for BASF. The province's gross domestic product is growing at 7 percent annually and has already exceeded that of Spain while closing in on that of South Korea.

Editor: William Clegg