Global
Factbook

Strategy

Corporate strategy

Chemistry is our passion. As an industry leader, we want to be the most attractive partner for challenges that can be solved with chemistry. That is why our customers are at the center of everything we do. We want to grow profitably and at the same time, create value for society and the environment. We help to change the world for the better with our expertise, our innovative and entrepreneurial spirit, and the power of our Verbund integration. This is our goal, embedded in our corporate purpose: We create chemistry for a sustainable future.

 

The world is changing at a rapid pace – more and more urgently than ever, solutions are needed for a more sustainable future. Chemistry plays a key role here. In almost all areas of life, it can help overcome pressing global challenges with innovative products and technologies – from climate change and using resources more sparingly to feeding the world’s population. This belief is expressed in our corporate purpose and is what motivates us day in and day out: We create chemistry for a sustainable future.

Our mission and motivation is to grow profitably and make a positive contribution to society and the environment. For example, BASF’s solutions contribute to climate protection and help to prevent or recycle waste, produce healthy and affordable food, and enable climate-smart mobility.

At the same time, as an energy and resource-intensive company, we are facing what is probably the biggest transformation in our over 150-year history: The shift toward a carbon-neutral and circular economy and the associated landmarks such as the European Green Deal demand from us new concepts and approaches – for the way we produce, for our raw material base and for our energy supply.

We also see these disruptive changes as an opportunity. As the world’s largest chemical company, we want to lead the way and actively and responsibly shape the change. That is why we are switching our energy and raw material supplies to renewable sources. We are strengthening our Verbund structure as the basis for resource-efficient, safe and reliable production. We are developing pioneering low-carbon production processes for our products. We are accelerating our innovation processes and deepening cooperation with partners to develop high-performance products that require fewer resources and have a lower carbon footprint. We are harnessing the many opportunities of digitalization. We are systematically aligning our portfolio with growth areas and future technologies, and are integrating sustainability into our value chains even more strongly. We support our customers with sustainable solutions on their own journey toward more sustainability. And we create a working environment in which our employees can thrive and contribute to BASF’s long-term success. This is how we live our corporate purpose.

Global trends provide opportunities for growth in the chemical industry

Population growth:
 

Driven by the emerging markets 

+24%

2021 to 2050

Digitalization: 
 

Rapid growth in volume of data 
660

zettabytes in 2030

China the largest market: 
 

Share of global chemical market

~50%

by 2030 

Climate change: 
 

Required reduction of greenhouse gas emissions
to achieve the 2°C goal 
–70%

by 2050 (baseline 1990)

Circular economy:
 

Non-recycled plastic waste worldwide

~200

million metric tons per year

Electromobility: 
 

Growing demand for battery materials
+21%

per year 2021 to 2030

 

Sources: U.N., IEA, Conversio, UBS Foresight, BASF

 

Status of Target Achievement in 20211

Profitable growth

8-decent work and economic growth and 9-industry, innovation and Infrastructure

SDG

8-decent work and economic growth and 9-industry, innovation and Infrastructure
SDG
8-decent work and economic growth and 9-industry, innovation and Infrastructure
SDG
8-decent work and economic growth and 9-industry, innovation and Infrastructure
SDG

Effective climate protection

green background image with with text 13-climate action
SDG

Sustainable product portfolio

icons 2-zero hunger, 6-clean water and sanitation, 12- responsible consumption and production, 13-climate action
SDG

Responsible procurement

8-decent work and 12-responsible consumption and production
SDG
8-decent work and 12-responsible consumption and production
SDG

Resource efficiency and safe production

6-clean water and sanitation, 8-decent work and economic growth
SDG
8-decent work and economic growth
SDG
6-clean water and sanitation, 12-responsible consumption and production
SDG

Employee engagement and diversity

5-gender equality
SDG
8-decent work and economic growth
SDG
hellgruen.jpg

1 Targets as published in the BASF Report 2021. he objective of these targets is to steer our business into a sustainable future and, at the same time, contribute to the implementation of the United Nations’ Sustainable Development Goals (SDGs).
2 BASF’s ethylene value chain was reorganized as of January 1, 2022. In this connection, the polyolefins and styrenics businesses of the joint venture BASF-YPC Company Ltd., Nanjing, China, which were previously reported under Other, were allocated to the Petrochemicals division.
The figure has been adjusted accordingly. Overall, the adjustments improved the BASF Group's ROCE for 2021 by 0.2 percentage points to 13.7%. For more information, see basf.com/q12022.
3 The goal includes Scope 1 and Scope 2 emissions. Other greenhouse gases are converted into CO2 equivalents according to the Greenhouse Gas Protocol.
4 We already achieved our 2025 sales target for Accelerator products in 2021. Consequently, we will update our portfolio steering target in the course of 2022.
5 We regularly calculate the employee engagement level. The last available survey was conducted in 2020. A new survey was started in spring 2022.

Our strategic action areas

BASF’s strategic orientation is founded on a comprehensive analysis of our markets and competitors. We continuously monitor global trends and anticipate the resulting growth opportunities and risks. The following six strategic focus areas enable us to focus on our customers while strengthening our leading position in an increasingly volatile and competitive environment.

Two BASF scientists examining device

Innovation is the bedrock of our success. BASF is a leader in the chemical industry, with around 10,000 employees in research and development and annual R&D spending of around €2.2 billion. We are expanding this position by strengthening specific research activities. We are also bringing research and development even closer together, incorporating our customers’ requirements into our innovation processes even earlier and more intensively, and expanding cooperation with customers and external partners.

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Two engineers examining BASF plant

We believe that the economy, environment and society are inextricably linked. We want to create value in all three areas with our products, solutions and technologies. We pledged our commitment to sustainability in 1994 and since then, have systematically aligned our actions with the principles of sustainability. We want to further strengthen our position as a thought and action leader in sustainability. We see sustainability as an integral part of our strategy as well as our targets, steering processes and business models. This establishes us as a responsible and attractive partner supporting our customers, opens up new growth areas and secures the long-term success of our company. Our approach covers the entire value chain – from responsible procurement and safety as well as resource efficiency in production to sustainable solutions for our customers.

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Female BASF engineer working on production line

Our core business is the production and processing of chemicals. Our strength here lies in the Verbund and its integrated value chains. The Verbund offers us many technological, market, production-related and digital advantages. Our comprehensive product portfolio, which ranges from basic chemicals to tailored system solutions, enables us to meet the increasingly diverse needs of our customers with a differentiated offering. This is complemented by our global presence, coupled with our many decades of experience, which have allowed us to develop an in-depth understanding of the needs and landscape of local markets.

Female BASF engineer touching digitalized screen

We want to leverage the extensive growth potential of digitalization and seize the associated opportunities to the benefit of our customers. To achieve this, we promote digital skills among our employees, and make digital technologies and ways of working an integral part of our business. Digitalizing our plants and systematically analyzing data enables us to further automate processes and in this way, increase the capacity, availability and efficiency of our plants. The combination of products, services and digital offerings also opens up new business models and advantages for our customers, such as in agriculture or personal care.

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group of male engineers working in the production factory

The acquisitions and divestitures made in the past few years have oriented our portfolio even more strongly toward innovation-driven growth areas. In 2021, we successfully integrated the polyamide business acquired from Solvay, further strengthening our position in engineering plastics. We closed the divestiture of our pigments business to the fine chemicals company DIC as planned in the first half of 2021. The sale of our shareholding in Solenis to Platinum Equity was also completed as planned in November 2021. We steer our six segments along our value chains. Our operating divisions drive forward our industry and customer orientation with differentiated strategies. The major growth projects for the coming years are our new Verbund site in Zhanjiang, China, and the expansion of our battery materials business.

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Two BASF employees working together

Our employees are key to BASF’s success. We believe it is important to have an inspiring working environment that fosters employees’ individual talents and enables them and their teams to perform at their best. We are pursuing three action areas to make our high-performance organization even more so: empowerment, differentiation and simplification. We value diversity in people, opinions and experience as being crucial to creativity and innovation. We embrace bold ideas, help our employees to implement them and learn from setbacks.

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Use of cash – clear focus on long-term shareholder value

use-of-cash.png

Our customers are our number one priority and are at the heart of our strategy. We want to be their most attractive partner for challenges that can be solved with chemistry. BASF supplies products and services to around 90,000 customers1 from almost all sectors and countries around the world. Our customer portfolio ranges from major global customers and small and medium-sized enterprises to end consumers. Our comprehensive product portfolio means that we are active in many value chains and value creation networks. We use various business strategies, which we adapt to the needs of individual industries and markets. These range from cost leadership in basic chemicals to tailored system solutions for specific customer applications.


We continue to drive forward our customer focus. We have refined our organizational structure to enable our operating divisions to flexibly address specific market requirements and differentiate themselves from the competition.

We are improving our customer relationships with a range of measures. For example, since 2019 we have been using the Net Promoter System® worldwide to record and optimize our solution orientation, product quality and delivery reliability based on direct customer feedback. We have been using the customer relationship management system Salesforce since 2020. The application helps sales employees to provide customer support and simplifies their work. Above and beyond this, we have intensified cooperation with our customers to jointly leverage innovation and growth potential. For instance, we established interdisciplinary teams in our business units to address the needs of our key customers even better and faster.

In 2021, we once again received awards from a number of highly satisfied customers.

Our customers’ satisfaction is the basis for our success, which is why quality management is of vital significance for BASF. Our Quality Management System is risk-based, process-oriented and focused on customer satisfaction. Based on our customers’ requirements, quality management at our production sites is generally certified according to external international standards such as ISO 9001, GMP, FAMI QS or IATF 16949.

BASF sales by industry 2021

Direct customers
> 20% Chemicals and plastics | Transportation (respectively)
10%–20% Agriculture | Consumer goods (respectively)
< 10% Construction | Electronics | Energy and resources | Health and nutrition (respectively)

1 The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.

virtual_car_interior.jpg

The virtual car

The automotive industry is one of our most important customer sectors. In February 2021, we launched an interactive platform that showcases BASF’s wide range of solutions and innovation expertise in mobility: Customers can explore over 500 application areas in a new virtual car – from high-performance plastics and coatings to automotive fluids, catalysts, cathode materials and more. Detailed information is provided on all products and solutions. The virtual car offers a selection of different powertrain technologies: combustion engine, plug-in hybrid, battery electric vehicle and fuel cell vehicle. E-mobility solutions can also be filtered by material properties such as battery efficiency, corrosion protection or thermal protection.

Discover the virtual car at basf-vcar.com

Last Update June 13, 2022