German chemicals giant BASF yesterday unveiled plans for a huge investment drive in the Asia-Pacific region, where it hopes to take advantage of above-average growth to more than double its sales.
BASF, which currently generates about 16 percent of its revenues in Asia-Pacific, announced plans to invest 10 billion euros (US$13 billion) there by the end of the decade and create up to 9,000 new jobs.
BASF said it aims to generate annual sales of 25 billion euros in the region by 2020, up from 11.7 billion euros last year.
More than 2 billion euros in regional sales would be achieved through new business and acquisitions by 2020.
Last year, BASF booked total worldwide sales of 72.1 billion euros on a workforce of 110,000.
The cumulative annual growth rate for real chemical production for the Asia-Pacific region is estimated at 6.2 percent until 2020, well above the world average of 4 percent, BASF said.
And the German group’s aim would be to “grow profitably at least two percentage points above regional chemical output.”
“To achieve this, BASF plans to invest 10 billion euros together with its partners by 2020 to further develop its local production footprint in Asia Pacific,” it said.
In March, BASF announced it would focus its business in Asia on chemicals destined for the textile and leather industries.
The group said it aims to produce about 75 percent of the total products it sells in Asia in the region by 2020.
“Local production improves resource efficiency by reducing the transportation needed for imports and exports, and by enhancing energy and raw material efficiency,” it explained.
BASF said it currently operates more than 100 production sites in the Asia-Pacific region, including two highly-integrated sites in Kuantan, Malaysia, and in Nanjing, China.
In addition to those main markets, BASF said it also hopes to explore “untapped markets in Mongolia, Laos, Myanmar and Cambodia.”
“In the next decade, Asia Pacific will face huge challenges while remaining the fastest growing market for the chemical industry,” BASF executive board member Martin Brudermueller said.
BASF said it aims to conduct 25 percent of its global R&D in the Asia-Pacific region by 2020, with a total of about 3,500 R&D personnel in the region, up from about 800 last year.