BASF Expects Sales of Billions from the New Verbund Site in China

Frankfurt -The chemical company BASF expects strong growth in China in the coming years. From the new Verbund site in Zhanjiang in the southern Chinese province of Guangdong alone, BASF expects sales of four to five billion euros by 2030, as CEO Martin Brudermuller said at an investor conference on Monday. The operating profit (Ebitda) should amount to 1.0 to 1.2 billion euros.

Overall, the group is planning investments of eight to ten billion euros for the site, which should peak between 2023 and 2025 and will be slightly higher than originally thought.

BASF had already announced the construction of the new Verbund site in 2018, and the first plants are scheduled to go into operation in the coming year. After the headquarters in Ludwigshafen and the Verbund site in Antwerp, Belgium, it is to become the third largest BASF production facility in the world. According to Brudermuller, China is the main growth driver for global chemical production. By 2030, two thirds of the growth should come from the region.

In Asia-Pacific, BASF already operates the two Verbund sites in Kuantan in Malaysia and in Nanjing, China. The group can produce a wide range of chemicals in its value chain itself and save a lot of money. Waste products or excess energy from one plant are used as feedstock elsewhere.

BASF chemical industry in China
In view of the rapid expansion of electromobility, the chemical company has high hopes for the battery materials business. For the first time, the management board announced sales targets to analysts for this area, which should also become one of the main growth drivers. BASF is aiming for sales of 1.5 billion euros by 2023, and more than seven billion euros by 2030.

Overall, according to BASF estimates, the market for cathode materials will grow by around 21 percent per year until 2030. To expand the business, with which the company has a market share of more than ten percent, investments of 3.5 to 4.5 billion euros are planned between 2022 and 2030. The operating return (EBITDA margin, excluding metals) should exceed 30 percent.

 

Reviewer overview

BASF Expects Sales of Billions from the New Verbund site in China - /10

Summary

Frankfurt -The chemical company BASF expects strong growth in China in the coming years. From the new Verbund site in Zhanjiang in the southern Chinese province of Guangdong alone, BASF expects sales of four to five billion euros by 2030, as CEO Martin Brudermuller said at an investor conference on Monday. The operating profit (Ebitda) should amount to 1.0 to 1.2 billion euros.

0 Bad!