¥69.5b! BASF Invests Heavily in China
- Chaileedo Press
- Sep 26, 2022
- 2 min read
Updated: Sep 27, 2022
The total investment is about 69.5 billion yuan ($9.702 billion), which is the largest single project invested by a German company in China and BASF's largest investment project to date.
On September 6th, the BASF (Guangdong) integration base project invested by the German BASF Group in Zhanjiang, Guangdong Province, held a ceremony for the full construction and commissioning of the first unit. The total investment in the project is reportedly about 69.5 billion yuan ($9.702 billion).
According to the plan, by 2030, the site will be BASF's third largest integrated production site in the world. It will provide solutions to local and multinational manufacturers in South China for industries such as automotive, home and personal care, aerospace, and pharmaceuticals.
Focusing on the cosmetics section, the construction of the site will also facilitate BASF's further development in the personal care area.
BASF's 2022 semi-annual report shows that sales in BASF's nutrition and personal care section in the first half of this year were 28.1 billion yuan ($3.923 billion), an increase of 29.8% compared to the same period, with the fastest growth rate in EBITDA. According to public analysis, this is due to the significant growth of the data related to the Care Chemicals business unit.
According to the financial report, its Care Chemicals business sales of 19.6 billion yuan ($2.736 billion) in the first half of this year, up 31.8% year-on-year, ahead of the Nutrition and Health business.
Meanwhile, BASF has continued to increase its investment in the Chinese cosmetics market in the past two years. For example, in June 2021, it established a long-term partnership with Shanghai Jahwa, including various aspects of TCM (Traditional Chinese Medicine) modernization, skin efficacy mechanism research and visualization, and sustainable development. In May this year, BASF also plans to expand its care chemicals site in Shanghai with a total investment of approximately 280 million yuan ($39 million), which will be used to build BASF's integrated headquarters for the production and sales of high-end cosmetic ingredients and care chemicals.
Moreover, on September 2 this year, BASF publicly announced the signing of a cooperation agreement with a local Chinese company, Ingredi Bio. It is known that Ingredi Bio is a start-up company headquartered in Yunnan, China focuses on the development and production of innovative, highly active, and sustainable botanical ingredients obtained from species native to the pan-Himalayan region, providing innovative natural active ingredients and total market solutions for the personal care industry.
In addition, over the past two years, international raw material giants such as Givaudan, Dow, and BASF have made several investments in the Chinese market. Among them, BASF’s (Guangdong) integration base is not only the group's largest investment project to date but also the largest investment of foreign raw material enterprises in China.
Overall, the current global situation is complex and volatile, international cosmetic ingredients giants are using their investment actions to grasp the long-term opportunities of the Chinese cosmetics market.
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