MOSCOW (MRC) -- BASF has broken ground on a USD10bn petrochemical complex in southern China, becoming the latest foreign company to increase its presence in the country as Beijing gradually relaxes restrictions on overseas investment, said the company.
Martin Brudermuller, the German chemical group’s chief executive, said the facility in Guangdong province is the largest investment in BASF’s 154-year history and reflects confidence in the growth of the Chinese market.
The company forecasts that China will account for 50 per cent of global chemical demand by 2030, up from 40 per cent today. BASF said the plant would be fully operational within a decade and employ thousands of workers.
Beijing loosened restrictions that excluded foreign companies from investing or taking ownership stakes in industrial and financial sectors after the pace of growth of foreign direct investment into China slowed to just 3 per cent last year.
Foreign companies have long been excluded from several high-growth sectors or forced to form joint ventures with Chinese companies. US and European chambers of commerce have called on Beijing to accelerate access for foreign investment.
The BASF facility, in the city of Zhanjiang, is the first of its kind in China that will be fully owned by the company after Beijing allowed full foreign ownership of chemical “cracking” facilities used to produce plastics.
BASF said the plant would produce 60,000 metric tonnes of plastic by 2022. Chinese central government officials attended the groundbreaking ceremony on Saturday.
As MRC informed before, in early September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices. SIBUR held a design session on sustainable development in the petrochemical industry. At the event, BASF shared details on its new sustainability strategy and its integration into the company's overall strategy. The participants were also presented with the company's methods of environmental impact assessment and approach to the circular economy, which embraces opportunities for chemical recycling of plastics, such as the ChemCycling project. With chemical recycling, fossil resources for chemical production can be replaced with recycled material from plastic waste.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.
BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.