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China (Mainland)

An interview with Sanjeev Gandi

In 2017, BASF recorded significant sales and earnings growth in Asia across all markets and business segments. Asia Pacific will continue to be the world’s largest market for production and consumption of chemicals, but significant challenges remain: volatile markets, fast-changing customerneeds, stringent regulatory conditions, and energy and resources scarcity.

Therefore, along with extending our product portfolio through global and regional acquisitions, we are also further expanding our production network in emerging markets including China, India, Malaysia and Thailand. Our planned investments of around €2.7 billion between 2018 and 2022 will focus on areas where BASF is technologically leading, hasa competitive advantage and expects above-average market growth. Our target remains to increase share of sales from own manufactured products. This will enable us to servecustomers in the region quicker and with greater flexibility.

We aim to help our local customers to compete and gain a foothold in global markets. Innovation is key to this. We collaborate on innovation with our customers and partners throughout the value chain to offer new solutions that meet their sustainability goals.

We have been continuously expanding our research and development (R&D) footprint in Asia Pacific over the past five years, to drive innovation by integrating customer and market needs at an early stage. In 2017, we established a second Innovation Campus Mumbai in India, coupled with the expansion of the Innovation Campus Shanghai in China, including a new battery materials lab and Automotive Application Center. We also expanded the scope of our postdoctoral center in Asia Pacific, the Network for Asian Open Research (NAO), to include a significantly broader range of university partners and research areas. In close collaboration with our customers and the R&D community in the region, these innovation hubs enable us to better gauge emerging demand and research on tailored solutions for our customers.

Asia Pacific is the region where global megatrends – urbanization, need for safe and sustainable food supply, growing energy demand – are most evident. We focus oninnovative businesses that contribute to energy efficient vehicles, affordable mass housing, advanced pharmaceutical production, more sustainable packaging and solutions forless resource-intensive agriculture. BASF will support these markets with solutions that meet our customers’ sustainability challenges.

We have achieved record business results in 2017 in Greater China, and we are optimistic that we can carry this momentum into 2018. Sales revenue of Greater China by location of customer in 2017 accounted for more than 10% of the entire BASF Group worldwide, an acknowledgement of our continuous efforts in this dynamic market.

The market environment has become more competitive and our customers demand more customized solutions. To meet these challenges, we continue to expand our local production capabilities with new investment projects and anenhanced product portfolio, including newly-acquired assets inthe local market. In addition, we are further driving innovation through market-oriented research and development to keep pace with changing market demands. We have been collaborating more closely with our customers to create newsolutions, and we have already achieved good outcomes witha number of China-based companies to support their go-global strategies. For example, we are working with the Chinese supplement brand By-Health on co-development of personalized nutrition solutions, and supporting the Chinese car maker SAIC-GM-Wuling Automobile at its new production plant in Indonesia.

By aligning our economic success with environmental protection and social commitment, we will achieve sustainable growth both within and beyond our fences, and along the entire value chain through our innovative product technology and solutions. We aim to share our best practices, and collaborate with our partners and customers to help them meet their sustainability targets.