BASF SE and China Petroleum & Chemical Corp. (Sinopec) broke ground Sept. 28 to expand their joint venture, BASF-YPC Co. Ltd. (BYC) in Nanjing, China.
The companies plan to jointly invest $1.4 billion to produce downstream chemical intermediates and specialties for the Chinese market.
BASF also outlined a plan designed to help double its sales in the Asia-Pacific region by 2020.
Under the expansion, BYC will raise its ethylene capacity from 1.3 billion pounds per year to about 1.6 billion pounds per year, expand three plants and build 10 plants.
The venture's products will serve end markets including agriculture, construction, electronics, pharmaceutical, automotive and chemical manufacturing.
The products made [in Nanjing] ultimately contribute to the modernization and sustainable development of the Jiangsu region and China overall, Martin Brudermuller, an executive director, said in a news release. With this expansion, we are putting a greater focus on specialty goods. These products are actually closely related to our daily life, especially in reducing overall energy use and creating a cleaner environment.
Ludwigshafen, Germany-based BASF recently outlined its strategy for Asia. The company's goal is to grow an average of 2 percent faster annually than the Asian chemical market through 2020.
With expected market growth of 4-5 percent per year, that would double BASF's sales in the region by 2020, while earning a premium on cost of capital.
BASF will increase employment by at least 5,000 people from a current figure of about 15,000 and it plans to generate 70 percent of its sales in the region from local production. The company plans to invest $2.9 billion in the region between 2009 and 2013.
The Asian growth markets will continue to provide attractive opportunities, and our [strategy] will help us to realize them, Brudermuller said.
The current economic situation does not change our positive expectations of the long-term potential of these dynamic markets.
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