BASF (BAS) Investor update summary

Strategic significance and market outlook

• Zhanjiang Verbund site is the largest single investment in company history and the largest by a German firm in China, completed on schedule and below budget, with a flawless startup in early 2026.

• Greater China is expected to drive global chemical industry growth, accounting for 55%–75% of global chemical production and projected to grow at 3.7% annually from 2025–2030, nearly three times higher than the rest of the world.

• Guangdong province, with a GDP of ~$2 trillion and key industries like automotive and electronics, is a major economic engine with strong demand for innovative chemical products, supported by robust industrial investments.

• The site supports a local-for-local strategy, with 80% of sales from local production and 90% of input factors sourced locally.

• The company expects continued robust demand in China, with domestic consumption and export-oriented industries fueling growth.

Operational excellence and digitalization

• The Zhanjiang site spans 4 sq km, employs over 2,000 people, and integrates upstream and downstream production for a broad product portfolio.

• Advanced digital infrastructure, including 5G, cloud services, and AI-driven automation, enables paperless operations and proactive supply chain management, with 95% of outbound logistics automated and real-time integration of over 8,000 utility measurements.

• Early recruitment and extensive training ensured a skilled workforce, drawing on experience from other regional sites.

• The site achieved steady-state operations quickly due to comprehensive commissioning and disciplined execution.

Sustainability and energy strategy

• Zhanjiang operates entirely on renewable energy, with a world-scale flex-feed steam cracker and a 1 million ton ethylene cracker powered by an E-drive using 100% green electricity.

• Heat integration and use of surplus gases further reduce CO2 emissions and fossil fuel consumption.

• Renewable energy is sourced from an offshore wind farm joint venture, long-term power purchase agreements, and on-site solar panels.

• The site’s carbon footprint is less than half that of conventional petrochemical sites and is projected to have one of the lowest CO2 footprints globally, aligning with China’s decarbonization goals.