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BASF: China's economic transformation has tremendous business opportunities

Information provider：zanya consultants Updated:2013/09/04 Website：www.companyformation86.com

"Economic transformation in China is gradually in depth, and particularly in Guangdong, which is walking in the forefront of the provinces and cities nationwide in terms of industrial upgrading, green manufacturing, environmental protection and energy saving. It means great commercial and development opportunities for BASF because it is consistent with our development concept and strategic planning. " BASF's global vice president, Greater China business administrator Dr. Liu Jianfeng said in the exclusive interview.

BASF is the largest chemical company in the world. BASF (China) Co., Ltd. has been established as a holding company since 1996 and explored development actively and played an important role in the Chinese chemical market. BASF currently have 21 wholly owned subsidiaries and 10 joint ventures in China, turning to be one of the largest foreign investors in the Chinese chemical industry.

In fact, the 20 years old BASF has already had business dealings with China as early as 128 years ago in 1885, beginning to sell its famous textile dyes magenta to China. In recent years, with the rise and development of the China’s economy, the Chinese market is of great strategic significance for BASF. In the past 20 years, BASF has invested more than 4 billion euros and established localized research and development, production, marketing, sales and after-sales service network with strong competitiveness in China’s market. Today, Greater China has become the world's third largest single market for BASF following the United States and Germany. BASF Greater China sales are over 6.7 billion euros in 2012.

Bet on Guangdong

In 1998, BASF began to expand the southern China market and established BASF (China) Polyurethanes Co., Ltd. in Guangzhou Nansha, producing elastomers and buffer combination of materials for the production of polyurethane automotive suspension system supporting parts. At that time, the Nansha did not build independent districts yet, and there were many shortcomings in transportation and living facilities.

Referring to reasons to choose Guangzhou Nansha, Dr. Lou Jianfeng said: "First, Guangdong is a major economic province of the country and bears huge market opportunity in petrochemical, automotive industry, manufacturing industry, electronic products and high-end footwear industry; Second, the geographic area of Guangzhou is superior; well-developed transportation is in the radiation within the Pearl River Delta region which is the manufacturing Industrial concentration area.

Third, Guangzhou is rich in human and research resources. As the capital of Guangdong Province, it has concentrating distributed colleges, moderate specialty schools and rich scientific research resources. Besides, powerful supports from the government cannot be ignored. Nansha government and Guangzhou Municipal government give us strong supports in all respects of our investment in the Nansha. "

In September 6, 2012, the State Council officially approved “the Guangzhou Nansha District Development Plan” and Nansha became the sixth national new area after the Shanghai Pudong New Area, Tianjin Binhai New Area, Chongqing Two Rivers District, Zhejiang Zhoushan Islands District and Lanzhou Area.

"We have high hopes for Nansha and are planning to enlarge this production base, but the details are still in discussion." According to Liu Jianfeng, “sustainable development” 'is the focus of BASF's strategic planning, which is in close proximity with the countries “Twelfth Five-Year plan”.

Guangdong is taking the lead nationwide in the development of high-end manufacturing, high-tech, environmental protection and energy-saving industries. Therefore, our concept will be well achieved in the Guangdong region and Guangzhou will play a leading role in the country to promote the development of our concept. Therefore, we are also considering adding more investment. "

A unique chemical company

In the eyes of the general public, it seems natural that chemical companies should be linked with high energy consumption, high emission and high pollution. BASF has been committed to change this image, and "sustainable development" principle is regarded as one of the primary targets of the company.

In July 2012, BASF released Annual Report 2011 covering economic, ecological and social aspects to the public and this is the fourth year in a row since BASF released annual report in 2009. It shows BASF’s sincerity and social responsibility, and moreover the confidence of this chemical giant.

"Although we are positioned as a chemical enterprise, our product portfolio is expansive, which is not merely limited to the upper level of the production of basic chemicals but includes products closer to customers in a lower level.

Analyzing our production structure, you will find that the proportion of our basic chemicals is not very high. "Lou Jianfeng introduced. Currently, BASF Group's business scope mainly covers five categories of chemicals, performance products, functional materials and solutions, crop protection, petroleum and natural gas.

Specialty chemicals are gradually enhancing its weight in chemical business composition relative to commodity chemicals. BASF has become a leading global supplier of specialty chemicals now.

"Many products of our company played a significant role in providing solutions to upgrade China's industrial and environmental protection and energy conservation. We are very concerned about the sustainability of development and put emphasis on environmental protection, health, energy consumption, resources conservation and improvement in product comfortableness and functionality.

“Every year, BASF Group invests over one billion euros (1.7 billion in 2012) world widely to do research and development, many products of which are extremely innovative.” said Lou Jianfeng.

Indeed, BASF's innovative products and solutions have become its main growth driver and production of new materials, polymer composites, polyurethane elastomers, and biodegradable materials are in an endless stream.

New launches of cutting-edge new products bring continued strong sales growth, and enable BASF maintaining a good development momentum in automotive, construction, household appliances, high-end system footwear, medicine, agriculture industries, etc. The relationship between BASF and consumers is closer and closer.

In recent years, Guangzhou's automobile industry is gradually rebooted and become the head of the three pillar industries in Guangzhou, which becomes an important city for China's car industry. The established huge industrial chain endows Guangzhou a good reputation of "Oriental Detroit". Currently, it is hammering at the construction of an “international automobile manufacturing center”. With determination to take a new route of urbanization, Guangzhou places environmental protection and livelihood issues in a higher position and its focus will be transferred from traditional automobiles to new energy vehicles.

For BASF, it means greater opportunities: the development of the automotive industry innovation cannot be separated from the material innovation during the transition from cars of energy conservation and environmental protection to those of safety and comfortableness and further to the new energy ones. As a global automotive industry's largest chemicals supplier, BASF offers services in all aspects of the automotive industry, including the vehicle, parts and after-market service.

With the functional integration and system solution development trends in automotive industry, BASF also developed from a raw material supplier to a solution provider. "It is said, in the past three years, BASF held more than 100 innovative seminars and high-level talks for customers of national automotive industry, bringing experts from both sides together to understand customer needs, stimulate creative inspiration.

At the same time, BASF is committed to support the construction of Guangdong high-end footwear research and development base, high value-added electronics industry and Guangdong’s building energy efficiencyand waste classification undertakings.

The far-sighted BASF has already been well prepared in face of the new situation and opportunities.