(Yicai Global) March 15 -- BASF will raise investment in China as part of the German chemical giant's efforts to pursue multiple opportunities in the country despite a backdrop of challenges in the global economy this year, according to Chairman for Greater China and President for Functions Asia Pacific Dr. Stephan Kothrade.
"We will continue to invest in local production, local innovation and local teams in the future," Dr. Kothrade told Yicai Global at the opening of the Ludwigshafen-based firm's new EUR34 million innovation campus in Shanghai. "We have been doing business in China now for 134 years, and we have a very strong customer base all over China."
The new 5,000-square-meter campus includes facilities for automotive applications and catalysis process research and development.
"We have invested millions of euros into the innovation campus here in Shanghai to offer possibilities to collaborate with customers in R&D," he said, adding that materials and sustainable solutions developed there would not only serve the local market but could also be applied in Europe and the Americas.
With a share of more than 40%, China is already the largest chemical market worldwide and drives the growth of chemical production globally. The country's share is expected to increase by half by 2030. However, the global economy is slated to ease off this year, which could also affect the industry.
"We believe that overall 2019 will be a challenging year," Dr. Kothrade said, adding that growth could be 0.4 percentage point lower than the 3.2% increase from last year. Expansion in Asian emerging markets may also weaken slightly.
The firm remains committed to the Chinese market and aims to build a USD10 billion highly integrated petrochemical complex in the southern city of Zhanjiang, Guangdong province, which is home to many of its customers. The project represents BASF's biggest single investment globally.
It is important to be close to the Guangdong-based customers, he said, adding that the firm aims to supply the latest technologies at the complex, especially those related to digitalization.
Editor: William Clegg