According to data recently released by the National Bureau of Statistics, in the first three quarters of 2023, China's economic recovery has become more obvious. The continued improvement of China's economy has also given foreign companies a boost in investment in China. Recently, many foreign financial institutions have successively raised their forecasts for China's economic growth. Lou Jianfeng, Chairman and President of BASF Greater China, also expressed his confidence in the long-term development of China's economy in an exclusive interview with reporters from Narada and N Video.
Since entering the Chinese market in 1885, German chemical giant BASF has gradually become an important foreign-invested enterprise in China's chemical industry. It has successively established production bases and R&D hubs in Shanghai, Nanjing, Chongqing, Zhanjiang and other places. Its products include automobiles, housing, food, Crops, medicine and many other fields cover almost every aspect of daily life. Today, Greater China has become BASF’s second largest market in the world.
In 2018, BASF announced the construction of an integrated production base in Zhanjiang, Guangdong. The total investment is expected to reach 10 billion euros by 2030, which will be independently constructed and operated by BASF. This is not only BASF’s largest overseas investment project to date, but also the “first example” of a wholly foreign-owned enterprise in China’s heavy chemical industry. In September 2022, the first unit of the base was officially put into production. Lou Jianfeng said that in the next 5 to 10 years, BASF will continue to comprehensively promote the construction and operation of large-scale projects in China, more than half of which will be used for the construction of the integrated base in Zhanjiang, Guangdong.
Optimistic about the growth potential of the Chinese market
Nandu: What is the reason why BASF has long attached importance to the Chinese market and is confident in investing in China?
Lou Jianfeng: China accounts for half of the global chemical market and has huge market growth potential. It has always been BASF’s growth engine. In particular, China's economy is currently transforming towards high-quality development, which is bound to create more opportunities for BASF, which focuses on innovation and sustainable development.
Nandu: What attracts BASF to locate its innovation R&D center in the Asia-Pacific region in China?
Lou Jianfeng: China’s market opportunities and its insistence on following the path of green development and promoting the comprehensive green transformation of economic and social development are very consistent with BASF’s concept of promoting sustainable development through chemical innovation and contributing to the zero-carbon economy. We have always believed that innovation is the key to driving green transformation. In addition, China is now a world leader in fields such as new energy vehicles and renewable energy, driving global development and having a good industrial foundation and innovation environment. Therefore, in terms of innovative research and development, BASF chooses to be based in Shanghai, focus on China, and face the world.
BASF Shanghai Innovation Park, opened in 2012, is BASF's largest R&D base in the Asia-Pacific region. Relying on the Shanghai Innovation Park, our innovation capabilities have been further strengthened and we can better support the needs of customers in China and even the Asia-Pacific region.
In June this year, the official completion of the third phase of the Shanghai Innovation Park project, including two new R&D buildings, marked another milestone for us in China, the world's largest chemical market. Through continuous investment in R&D, we are committed to improving local innovation capabilities, especially in fast-growing areas such as electric vehicles, high-end manufacturing and renewable energy, to innovate together with customers and achieve win-win results.
In addition, we also have a strong focus on open innovation in collaboration with academia. Chinese universities have very strong innovation capabilities and can be well integrated with the commercial innovations that BASF needs and can effectively increase the scale of production. Next, BASF will make full use of its innovation park base in China to further cooperate with academia and start-up companies.
A BASF researcher checks daily instrument readings at the Process Catalysis Laboratory in Shanghai Innovation Park.
Nandu: What areas does the Shanghai Innovation Park focus on? What are its features and results?
Lou Jianfeng: BASF mainly focuses on material innovation in Shanghai. Such as the research and development of performance materials, including a variety of advanced high-performance material solutions to provide excellent flame retardancy, electrical insulation and durability, as well as excellent processability and aesthetic versatility to support electric vehicles, renewable energy Rapid growth in renewable energy, power tools, consumer electronics and automotive industry applications.
In addition, the Shanghai Innovation Park also focuses on the optimization and innovation of production processes, and directly applies relevant process results to BASF's 30 production bases in China, reducing our own energy consumption and use of chemicals in the production process, and improving industrial efficiency. Process recovery rate.
In line with China’s “double carbon” goals
Nandu: In 2022, BASF’s sales in Greater China will increase by 60% compared with 2017, while carbon emissions will decrease by 19%. What efforts has BASF made to reduce carbon emissions?
Lou Jianfeng: BASF has made various efforts to achieve its carbon reduction goals. At the R&D level, we actively promote innovation. One example is that BASF's steam crackers play a key role in the production of basic chemicals. By using renewable energy to replace natural gas, this innovative technology is expected to achieve at least 90% reduction in carbon dioxide emissions compared to currently used technologies. Currently, BASF is conducting tests at its German headquarters on the world's first fully electric-heated steam cracking device.
ProductionFine chemicals, such as new materials, new products, new solutions, etc., will also become the focus of development.
Nandu: How does BASF view the growth prospects of China’s economy? What other major investments or projects are planned in the Chinese market next?
Lou Jianfeng: BASF remains confident in the long-term development of China’s economy. Affected by the global economic environment, there may be some short-term fluctuations or uncertainties. Even so, we will continue to unswervingly continue to comprehensively promote the construction and operation of large-scale projects in China such as the construction of the Zhanjiang integrated base.
In the next 5 to 10 years, more than half of the funds we plan to invest in China will be used for the construction of the integrated base in Zhanjiang, Guangdong. In addition, we will continue to promote many projects in Nanjing, Shanghai, Chongqing and other cities, striving to increase production capacity while continuously enhancing innovation.
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