BASF in Asia Pacific
At a glance
Sales by location of customer in the Asia Pacific region rose by 2% to €14,646 million in 2018 (2017: €14,343 million).
Sales at companies headquartered in the Asia Pacific region rose by 2% to € 13,886 million in 2018 (2017: € 13,658 million). In local currency terms, sales rose by 5% year on year. The positive development was mainly driven by the Functional Materials & Solutions segment. We also increased sales in the Agricultural Solutions segment.
All segments increased volumes; Functional Materials & Solutions and Performance Products also achieved higher prices. By contrast, sales were consistently weighed down by currency effects. Portfolio measures had no effect on sales development in 2018. The trade conflict between the United States and China dampened economic sentiment across Asia, leading to lower prices and volumes year on year in the fourth quarter of 2018.
EBIT in the region decreased by 18% year on year to €1,820 million. This was primarily due to the lower contribution from the Chemicals segment as a result of narrower margins in the isocyanates business, as well as for steam cracker products at our joint venture. Lower fixed costs were unable to compensate for these effects.
As part of our regional strategy, we aim to further increase the proportion of sales from local production in Asia Pacific. We once again made progress toward this goal: For instance, we started commercial production of polyoxymethylene (POM) in Gimcheon, South Korea, in October 2018. We started production of citral, citronellol and menthol at our new aroma ingredients complex in Kuantan, Malaysia.
Our investments in production facilities as well as in research and development serve to bring products to market for our local and global customers in this fast-growing region. We therefore plan to build an integrated Verbund site in Zhanjiang in the southern Chinese province of Guangdong and expand our existing joint venture with Sinopec in Nanjing, China.
From procurement at the supplier end, to production at production plants to the product delivery to the customers, we are committed to energy efficiency and global climate protection along the value chain, around the world and in Asia Pacific.
In India, BASF and the Navi Mumbai Municipal Corporation collaborated on an innovative safe water and sanitation project. A solar powered, cashless community water treatment plant, commonly referred to as a “water ATM”, will dispense potable drinking water at just Rs. 8 (USD 0.11) per 20 liters when accessed with a debit card. Water is harvested from rain and other sources, and is purified with BASF’s ultrafiltration solution. This innovative social business model offers clean and affordable drinking water to 10,000 people.
At production sites throughout Asia Pacific, we adopted various measures to reduce emissions along the value chain. These include efficient technologies for generating steam and electricity, energyefficient production processes, and comprehensive energy management systems.
Our products make an important contribution toward helping our customers avoid emissions. In 2018, Nippon Paint launched an interior paint in China, Infinite Air, made with BASF dispersions derived from renewable resources. With the TÜV SÜD-certified biomass balance approach from BASF, fossil resources are replaced with renewable feedstock. The launch of this new paint helps save fossil resources and reduce greenhouse gas emissions while providing excellent product performance and minimizing odor.
As of the end of 2018, BASF employed 19,303 people in the Asia Pacific region (2017: 18,256). Of these, 25.7% were female (2017: 25.9%). There were 2,094 new hires in the region in 2018, 31.1% of which were female (2017: 24.9% of 2,141).
Throughout the region, BASF developed customized campaigns and activities to support employee engagement, impactful leadership, and inclusion of diversity. These initiatives help to support and engage employees, fostering a safe, inclusive and inspiring working environment.