Global trends provide opportunities for growth in the chemical industry
Global
Factbook
Strategy
Corporate strategy
Chemistry is our passion. We want to be the most attractive partner for our customers to overcome challenges that can be solved with chemistry. Our customers are at the center of everything we do. With our products and technologies, our innovative and entrepreneurial spirit and the power of our Verbund integration, we want to grow profitably while creating value for society and the environment. This is our goal, which is embedded in our corporate purpose: We create chemistry for a sustainable future.
Humankind is facing enormous challenges. The climate is changing, natural resources are beoming scarcer, pressure on ecosystems is increasing, and our growing world population needs to be fed. More and more urgently, solutions are needed for a sustainable future. Chemistry plays a key role here. In almost all areas of life, it can pave the way to greater sustainability with innovative products and technologies and accelerate the necessary transformation.
Our mission and motivation is to grow profitably and make a positive contribution to society and the environment. For example, BASF’s solutions help to protect the climate, avoid or recycle waste, use resources more efficiently, produce healthy and affordable food, and enable climate-smart mobility.
At the same time, we are undergoing profound changes. We need to transform our company, as we have done repeatedly in the more than 150-year history of BASF. This time, we are moving toward climate neutrality and the circular economy. In doing so, we must successfully navigate long-term policy decisions like the European Green Deal, overcome the consequences of current geopolitical conflicts such as the war in Ukraine, and drive forward digitalization. All of this requires a clear vision as well as a high degree of creativity and flexibility.
Both long-term trends and short-term developments in an environment characterized by volatility and uncertainty are challenging for the chemical industry. At the same time, they also open up numerous opportunities for new business areas and innovative products.
We want to lead the way in the chemical industry and responsibly shape the change – with ambitious targets and a clear roadmap: We are gradually switching our energy and raw material supplies from fossil to renewable sources. We are adapting our Verbund structure to the new circumstances as the basis for resource-efficient, safe and reliable production. We are developing new, pioneering carbon-free production and low-carbon production processes for our products. We are accelerating our innovation processes and deepening cooperation with customers, suppliers and other partners to develop high-performance products with a lower carbon footprint. We are developing recycling technologies for various waste streams to strengthen the circular economy. We are harnessing the many opportunities of digitalization across all areas of the company. We are systematically aligning our portfolio with growth areas and future technologies and are integrating sustainability into our value chains even more strongly. We create a working environment in which our employees can thrive and contribute to BASF’s long-term success.
Population growth:
Driven by the emerging markets
+22%
2022 to 2050
Digitalization:
Rapid growth in volume of data
660
zettabytes in 2030
China the largest chemical market:
Share of global chemical market
~55%
by 2030
Climate change:
Required reduction of greenhouse gas emissions
to achieve the 2°C goal
–70%
by 2050
Circular economy:
Non-recycled plastic waste worldwide
~200
million metric tons per year
Electromobility:
Growing demand for battery materials
~22%
per year 2022 to 2030
Sources: U.N., IEA, Conversio, UBS Foresight, BASF
Status of Target Achievement in 20221
Profitable growth
SDG
SDG
SDG
SDG
Effective climate protection
SDG
Responsible procurement
SDG
SDG
Resource efficiency and safe production
SDG
SDG
SDG
Employee engagement and diversity
SDG
SDG
1 Targets as published in the BASF Report 2022. The 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 Scope 1 and Scope 2 (excluding the sale of energy to third parties, including offseting). The target includes other greenhouse gases according to the Greenhouse Gas Protocol, which are converted into CO2 equivalents (CO2e).
3 We will update the safety targets and report according to a new system in 2023.
4 We regularly calculate the employee engagement level. The most recent survey was conducted in 2022.
Our strategic action areas
BASF’s strategic orientation is founded on a comprehensive analysis of our markets, competitors and the economic environment. We continuously monitor global trends and short-term developments and anticipate the resulting opportunities and risks. The following six strategic action areas enable us to focus on our customers while strengthening our leading position in a competitive environment.
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 €2.3 billion. We want to focus our research activities especially on areas with a high demand for innovations, in particular agriculture, battery materials, polymer technologies as well as catalytic and biotechnological methods. In addition, we are expanding our cooperation with customers, universities, research institutions and external partners.
We believe that the economy, environment and society are inextricably linked and interrelated. 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 pioneer for sustainable solutions. We see sustainability as an integral part of our strategy as well as our targets, steering processes and business models. In doing so, our aim is to be a responsible and attractive partner for our customers, develop new growth areas and lay the foundation for the long-term success of our company. Our approach covers the entire value chain – from the responsible procurement of our raw materials and safety and resource efficiency in production to sustainable solutions for our customers.
Our core business is the production and processing of chemicals. Our strength lies in the Verbund and its integrated value chains. This enables us to achieve efficient, reliable and CO2-optimized production. We can thus leverage synergies in the development and application of new technologies and the use of digital solutions. At the same time, the Verbund is the foundation for meeting the increasingly diverse needs of our customers with a differentiated offering. Our comprehensive product portfolio ranges from basic chemicals to custom system solutions. Our strategy is to be close to our customers: We produce locally for local markets. Our global production footprint contributes to the regional diversification of our sales and earnings distribution, making it part of our risk management.
We want to leverage the diverse growth potential of digitalization, seize the associated opportunities to the benefit of our customers and strengthen our competitiveness. To achieve this, we promote digital skills among our employees, cooperate with partners 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, manage the capacity, availability and efficiency of our plants in line with market conditions. The combination of products, services and digital offerings also creates new business models and advantages for our customers, such as in agriculture or the personal care industry.
We are orienting our portfolio even more strongly toward innovation-driven growth areas with high Verbund synergies. Following major acquisitions (battery materials, engineering plastics, farming solutions) and divestitures (pigments, construction chemicals, paper and water chemicals) in recent years, we continued on this course in 2022 with divestitures and division-specific partnerships. At the same time, we are strengthening the basis for our organic growth with investments. The major growth projects for the coming years are our new Verbund site in Zhanjiang, China, and the expansion of our battery materials business.
Our employees are key to BASF’s success. That is why we believe in the importance of an attractive total offer package and 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 drive our high-performance organization: empowerment, differentiation and simplification. We value diversity in people, opinions and experience as being crucial to creativity and innovation.
Customer focus
In 2022, we once again received awards from a number of highly satisfied customers.
Quality Management System
Our Quality Management System comprises our Environment, Health, Safety and Quality (EHSQ) policy as well as further standards, guidelines and processes for quality management along the value chain. Our Quality Management System is risk-based, process-oriented and focused on customer satisfaction. Its mandatory elements are set out in a Corporate Requirement. These include core processes such as nonconformance management, the procedure for product recalls, change management and the performance of internal audits. Local implementation of the central requirements defined by the Environmental Protection, Health, Safety & Quality unit in the Corporate Center is the responsibility of our business units and sites.
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 2022
| Direct customers | |
| > 20% | Chemicals and plastics | Transportation (respectively) |
| 10%–20% | Agriculture | Consumer goods (respectively) |
| < 10% | Construction | Electronics | Energy and resources | Health and nutrition (respectively) |
BASF sales by region 2022
Location of customer
Good to know
Our customers in focus
BASF supplies products and services to around 82,000 customers1 from almost all sectors and countries around the world. Our customers are mainly global and small and medium-sized companies but also include end consumers. We are continually refining our organizational structure so that our operating divisions can flexibly address specific market and customer requirements and differentiate themselves from the competition. The operating divisions pursue different business strategies – from cost leadership in basic chemicals to tailored system solutions for specific customer applications. Above and beyond this, we are intensifying cooperation with our customers to jointly leverage innovation and growth potential. For instance, we have established around 60 strategic customer networks to address the needs of our most important customers even better and more quickly.
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 in which sales were generated.