BASF detailsgrowth opportunities in Asia Pacific

BASF details the growth opportunities in Asia Pacific

10:04 AM, 27th September 2016
BASF details the growth opportunities in Asia Pacific

LONDON, UK: At the BASF Roundtable Asia Pacific for investors and analysts, the group presented details on how it intends to become profitably in the region by building on its strengths.

"We are well situated in Asia Pacific, the world's biggest business sector for the generation and utilization of chemicals. We are utilizing the development chances of the region to add to the general achievement of BASF Group," said Sanjeev Gandhi, member of the board of executive directors of BASF SE and responsible for Asia Pacific.

Development in Asia Pacific expected to outpace different regions

BASF expects total national output and chemical production in Asia Pacific to keep on outgrowing different areas, despite the recent slowdown.

BASF now evaluates the compound annual growth rate (CAGR) for real chemical production through 2020 for Asia Pacific at around 5.6 percent, still well above the world average of 3.7 percent.

The company continues to concentrate on the following priorities for its business in Asia Pacific:

Market: BASF takes part in innovative and developing markets where chemistry is a vital empowering agent for their improvement. These include transportation, consumer products, electronics, construction, packaging and agriculture.

Innovation: By using its new R&D assets, BASF aims to accelerate innovation in Asia Pacific. More than 900 employees already work in R&D across the region. They create solutions in close cooperation with clients from different enterprises. Following the expansion of the BASF Innovation Campus Asia Pacific in Shanghai, China, the company is setting a second Innovation Campus Asia Pacific in Mumbai, India. It will be inaugurated in 2017, focusing on crop protection and process engineering.

Portfolio management: Both worldwide and regional level, portfolio management is an on-going task at BASF. The company buys businesses that complement its present portfolio while reinforcing its existing businesses and divesting activities which have a lesser fit with the portfolio or a lower potential for differentiation. With this approach, BASF strives to keep a balanced portfolio of specialties and solutions and differentiated commodities.

Investment: Following significant capacity increases in the region between 2012 and 2016, BASF will selectively extend its local production network in the coming years. Planned investments of around €3.5 billion between 2016 and 2020 will focus on areas where it is technologically leading, has a competitive advantage and expects robust market growth. BASF’s target to produce around 75 percent of the products it sells in Asia Pacific in the region by 2020 remains valid.

People: BASF has excellent individuals and pioneers in the local, and keeps on drawing in, create and hold ability in Asia Pacific. The organization collaborates with driving colleges to get to ability and offers different training opportunities, for instance through the BASF Learning Campus in Singapore. 

Excellence: Functional, structural and operational excellence will help BASF drive beneficial development in the area. With an expected contribution of around €250 million, Asia Pacific is a significant contributor to BASF’s global operational excellence program DrivE, which focuses on an annual earnings contribution of €1 billion from the end of 2018 onward.

“China did not develop as fast as we had expected. We saw low development in full grown Asian markets. India and South East Asia are picking up slightly. Overcapacities in some commodity product lines have added to a changing business environment,” continued Gandhi. “However, even under the ‘new normal,’ Asia Pacific is the growth engine for the world economy. We still see great potential for BASF as the basics have not changed.”

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