BASF & Wacker & Merck accompanied German Scholz to China

German Chancellor Scholz kicked off his first visit to China on November 4. The German economic delegation accompanying him also attracted international attention. Among them, BASF, Wacker Chemical and Merck Group are the world's leading cosmetics ingedients enterprises.

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(Credit：website)

Bloomberg mentioned that this is Scholz's first visit to China since he took office as German chancellor in December last year. 2021, China is Germany's largest trading partner, with merchandise trade between the two countries reaching €246 billion (about $241 billion). Earlier, data from China's Ministry of Commerce of The People’s Republic of China showed that from January to August 2022, the amount of foreign investment actually used in China reached 892.74 billion yuan (about $123 billion), up 16.4 percent year-on-year. And among them, German investment in China grew at a rate of 30.3%, second only to South Korea (58.9%).

(Credit：BASF)

In the cosmetics sector, BASF products mainly include surfactants, emulsifiers, polymers, emollients, active ingredients, pigments and UV filters, etc. BASF is also one of the several leading domestic suppliers of sunscreens in China.

According to BASF 2022 third quarter earnings data, the company recorded third quarter sales of €21.946 billion (about $21.5 billion), an increase of 11.6% year-on-year. The third quarter earnings report showed that production of one of the company's main chemicals rose 6.9% year-on-year in China, a much higher increase than the 2.7% increase in North America, while production in the EU and Asia Pacific (excluding China) actually declined by 6.7% and 6%, respectively.

Currently, Greater China is BASF's second largest market worldwide. BASF is also one of the largest German companies to have recently invested in China. The company recently announced that it would invest €10 billion (about $9.8 billion) by 2030 to build a new "integrated site" in Zhanjiang City, Guangdong Province, China, which is also BASF's largest single investment ever.

(Credit：WACKER Group)

Another notable company, German raw materials manufacturer WACKER, is also one of the world's silicone giants, whose silicone oils are used in toiletries and skin care products.

WACKER Group sales in the third quarter of 2022 amounted to €2.13 billion (about $2.1 billion), up 29 percent from the same period a year earlier. full-year 2022 EBITDA is now expected to be in the range of €2.1 billion (about $2.05 billion) to €2.3 billion (about $2.3 billion). Christian Hartel, WACKER's President and CEO, has said that WACKER aims to increase group sales to more than €10 billion ($9.8 billion) by 2030, while maintaining a high level of profitability.

In addition, on May 18, 2022, WACKER announced that it had completed the acquisition of a 60 percent stake in specialty silane producer Shandong Guike New Materials Co. With this acquisition, Shandong has become WACKER's second largest silicone production site in China, after Jiangsu.

Christian Hartel, WACKER's president and CEO, said that the acquisition of a stake in Shandong Guike will enable WACKER to further expand its range of high-quality specialty products for the Asian market and to be closer to its customers in the fast-growing Asian consumer market.

(Credit：ALAMY STOCK PHOTO)

The global biotechnology giant Merck KGaA was also among the team that went on this trip. Merck was founded in 1668, as a veteran ingredient manufacturer, Merck has more than 350 years of experience in ingredient research and development and leading global pharmaceutical and chemical resources. Merck has a comprehensive line of cosmetic ingredients and has long provided quality products and solutions for global head brand owners including P&G, Unilever, L'Oreal, Estee Lauder, etc. According to the earnings report, Q3 2022 revenue was $14.959 billion, beating market expectations by 6.32%. Revenue of MERCK in H1 of 2022 was €10.77 billion (about $10.5 billion), up 13.31% year-on-year and its net profit of €1.75 billion (about $1.71 billion), up 17.16% year-on-year. Asia Pacific is MERCK's top market, with revenues of €3.78 billion (about $3.7 billion) in H1 2022, representing 35.13%, up 12.46% year-on-year. MERCK's China president, An Gaobo, has said that visionary multinational companies would continue to increase their share of the Chinese market. It is worth mentioning that the Chinese brand Pechoin and Merck reached an international strategic cooperation. The partnership will give new strength to the Chinese domestic beauty market and also bring consumers more high efficacy beauty products with technology content, said Pechoin.

The German company's focus on the Chinese market has also sparked a lot of media buzz. As the German newspaper Handelsblatt has previously reported, more than 100 companies applied for the coveted seats on government jets, and 12 were finally approved, because business in China has never been more important than it is today. This may mean that the Chinese market will continue to be one of the main focuses of German headquarter companies.

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