BASF signs MoU for site in China

BASF is considering building a chemical production site in South China’s Guangdong Province, which the German chemicals group said would be its first wholly owned plant in China.

In June, China unveiled further easing of foreign investment curbs as the government moved to fulfill its promise to open its markets further.

BASF Chief Executive Martin Brudermueller and a Guangdong representative on Monday signed a Memorandum of Understanding (MoU) for the construction of the $10 billion site, which could employ 2,000 staff plus 1,000 external contractors by completion in 2030.

The deal came as Chinese Premier Li Keqiang and German Chancellor Angela Merkel met in Berlin on Monday.

The integrated chemicals complex in Guangdong would be BASF’s largest investment ever and would ultimately be its thirdlargest site after its headquarters in Ludwigshafen, Germany, and Antwerp, Belgium.

BASF is the only major Western chemicals player banking on an integrated value chain – which it has dubbed “Verbund” – in which a company owns businesses throughout the production process.

The Guangdong site will initially have petrochemical plants and a steam cracker producing ethylene. Eventually, products for the consumer goods and transportation sectors will be made there, BASF said.