Welcome

^{Letter from the President}

Dear stakeholders,

BASF Greater China had a volatile and challenging year in 2022, but it was still a significant and incredible year. BASF continues its long-term endeavors to contribute to Greater China's economic, environmental, and social success.

I am so proud of our team's perseverance, dedication, and commitment throughout the year to ensuring safe production, timely deliveries, and business continuity. We achieved sales of approximately €11.6 billion in 2022 (2021: around €12 billion) to customers in Greater China.

We are continuously expanding our local production capabilities to meet the growing demand for chemicals in the dynamic Chinese market. The expanded and new plants at the Nanjing Verbund site – jointly operated with Sinopec – will be operational by late 2023.

We inaugurated the first plant at the new Zhanjiang Verbund site in 2022, producing engineering plastics compounds for our Chinese customers, primarily in the automotive and electronics industries. The Zhanjiang Verbund site, would be BASF's largest investment with up to €10 billion by 2030, and is now in the main construction phase, with a focus on building the heart of the Verbund including a steam cracker and downstream chemical plants.

Last year, we expanded our battery materials production capacity in Changsha and Shizuishan, and formed a joint venture with Heraeus in Pinghu to recover precious metals from spent automotive catalysts, in order to strengthen our strategic position in battery materials and the automotive industry while promoting the circular economy in China.

Furthermore, the third phase of our Innovation Campus Shanghai was in full construction and will be operational in 2023. With a total investment of almost €280 million in Innovation Campus Shanghai, we will strengthen our local innovation capabilities in China. We will continue to collaborate with our customers and partners in China to co-create innovative and sustainable solutions for China and the rest of world, leveraging our expanding global network.

BASF aims to achieve net zero emissions globally by 2050. In Greater China, we have reduced carbon emissions in our operations by 19% despite an increase of almost 60% in sales volume compared to 2017. This is mainly attributed by continuously improving the energy and process efficiency of our plants through digitalization and increasing the usage of renewable energy. Safety remains our top priority. We will continue to promote a safety culture throughout our businesses and the value chain.

We strive to be responsible corporate citizens in the areas where we operate. Despite the challenges posed by the coronavirus pandemic last year, we continued to engage with our local communities, celebrated the 20th anniversary of BASF Kids' Lab in Greater China with new initiatives, and organized our annual employee volunteer clean-up programs across the country.

Moving forward, 2023 will continue to be fraught with challenges and uncertainties. Nonetheless, I am confident and optimistic about the future since we have a strong manufacturing footprint, a leadership position in sustainability, and growing innovation capabilities in Greater China. I am excited to work with all of our stakeholders to co-create a more sustainable future in Greater China!