Basf ETR: BAS executives said the company’s new Zhanjiang Verbund site in Guangdong province has started operations successfully, positioning the German chemicals group for further growth in China while adding a major new production platform built around digitalization, feedstock flexibility and renewable power.
Speaking during a virtual deep dive for analysts and investors, Markus Kamieth, Chairman of the Board of Executive Directors, said Zhanjiang is BASF’s seventh global Verbund site and its first new Verbund opening since Nanjing in 2005. He described the project as BASF’s largest single investment globally and the largest investment by a German company in China.
Kamieth said the project was completed on schedule and below the original budget, with startup in early 2026 in line with expectations. At peak construction, more than 35,000 people from over 150 companies worked at the site.
Zhanjiang site expected to generate up to EUR 5 billion in sales by 2030
Stephan Kothrade, Member of the Board of Executive Directors and Chief Technology Officer, said BASF expects the Zhanjiang Verbund site to generate sales of EUR 4 billion to EUR 5 billion by 2030, equal to roughly 10% of current sales in the company’s core businesses. EBITDA is expected to reach EUR 1 billion to EUR 1.2 billion by 2030.
For 2026, Kothrade said BASF still anticipates “slightly negative EBITDA” from the site because of startup costs and ongoing optimization of infrastructure and utilities. He said the key inflection point is expected in 2027, when the site reaches full capacity utilization, startup costs phase out and optimization measures begin to take effect. BASF expects the site to contribute positively to EBITDA from 2027 onward.
Kothrade said total capital expenditure for the project from 2019 to 2028 amounts to EUR 8.7 billion, “considerably below the original budget.” Depreciation is expected to amount to more than EUR 500 million per year starting in 2026.
Company cites China growth and Guangdong location
Kamieth said BASF has operated in China for more than 140 years and began production there in 1969. In 2025, about 80% of BASF’s sales in Greater China came from local production, while around 90% of required input factors were sourced locally. The company operates 29 production sites, has 28 major wholly owned companies and participates in 12 major joint ventures in China.
He said BASF generated EUR 8.2 billion in sales with customers in Greater China, excluding roughly EUR 2 billion in sales from BASF-YPC Company Limited, its 50/50 joint venture with Sinopec operating the Nanjing Verbund site. BASF accounts for that venture at equity.
Between 2015 and 2025, BASF’s sales volumes in Greater China grew at a compounded annual rate of 6%, while EBITDA before special items grew 11% annually, Kamieth said. He added that BASF expects global chemical production to grow about 2.8% annually from 2025 to 2030, with Greater China growing 3.7% annually and accounting for about three-quarters of global chemicals demand growth during that period.
Kamieth said Guangdong was selected because China’s economic growth has increasingly moved south. He called Guangdong “the powerhouse of the Chinese economy,” citing its population of nearly 128 million and GDP roughly equivalent to South Korea or Spain. He said the province remains a significant net importer of chemical products.
Integrated site includes 19 plants and a flex-feed cracker
Harry Lim, President of Mega Projects Asia at BASF, said the Zhanjiang site covers 4 square kilometers, or 400 hectares, and has direct access to a deep-water seaport. The site includes a 1 million metric ton ethylene flex-feed steam cracker capable of processing feedstocks including naphtha and butane.
Lim said BASF had successfully started 19 plants and 33 production lines as of May. One additional plant, for tridecanol, is scheduled to be commissioned in 2028. The site employs around 2,000 people and is BASF’s third-largest Verbund site after Ludwigshafen and Antwerp.
Kothrade said the site’s value chains include ethylene-based products such as ethylene oxide, surfactants and brake fluid precursors; propylene-based products such as acrylic acid and oxo alcohols; and C4-based products that support BASF’s citral value chain for aroma ingredients and vitamins. The site also includes engineering plastics compounding and thermoplastic polyurethane production serving industries including automotive, electronics, sports shoes and sports equipment.
BASF highlights renewable power and digital operations
Lim said the Zhanjiang site uses 100% renewable energy. BASF is sourcing power through a joint venture with Mingyang for an offshore wind farm planned at 500 megawatts, long-term power purchase agreements with partners including State Power Investment Corporation and GEDI, and solar panels installed on site.
He said the site’s main cracker compressor is electrically driven using renewable energy, rather than steam generated from natural gas and cracker fuel gas. BASF also uses surplus cracker fuel gas and carbon dioxide off-gas from downstream plants to produce syngas for downstream products such as oxo alcohols. Lim said these measures help reduce the site’s carbon footprint by more than half compared with a conventional petrochemical site.
Lim also described the site as a “smart Verbund,” using 5G, cloud services, big data and artificial intelligence. He said AI agents automate 95% of outbound delivery processes across multiple systems, and the site has more than 8,000 utility measurements.
Executives address demand, supply and near-term trading
During the question-and-answer session, Kamieth said BASF remains “fairly certain” about its 2025-to-2030 China growth outlook, citing strong demand and China’s resiliency in industrial value chains. On second-quarter trading, he said a short-term volume spike seen in March had begun normalizing, with May looking more like April than March. He said pricing remained “rather robust” and that BASF expected the second quarter to come in around analyst expectations, while remaining cautious because of volatility and the situation in the Middle East.
Asked about China’s supply growth and overcapacity, Kothrade said the Chinese government is paying increased attention to the supply side, including a plan to screen oil and chemical assets older than 20 years for potential phaseout, upgrades or reconstruction. Kamieth also pointed to China’s “five plus nine” framework under the 15th Five-Year Plan, saying binding decarbonization indicators could lead to curtailment of capacities that do not contribute to those targets.
On India, Kothrade said BASF views the country as an interesting and fast-growing market, but not as a platform for producing chemicals or plastics for export. He said BASF would look at opportunities for the domestic market but was “not in a rush” to make an investment decision.
About Basf ETR: BAS
BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries.
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