Business expansion in emerging markets

In the years ahead, we want to continue to grow in the emerging markets and expand our position there. We define the emerging markets as Greater China, the ASEAN countries,1 India, Pakistan and Bangladesh; Central and South America; eastern Europe; the Middle East, Turkey and Africa. Today’s emerging markets are expected to account for around 65% of global chemical production in 2025. We aim to benefit from the above-average growth in these regions, which is why we have invested more than a quarter of our capital expenditures2 (excluding Oil & Gas) there in the past five years.

Growth in the emerging markets gathered pace slightly in 2017. This was attributable on the one hand to more positive developments in eastern Europe. The eastern European E.U. countries recorded dynamic growth and the Russian economy again improved slightly after two years of recession. In Brazil, too, the economic situation improved markedly over the course of the year. In China and the other Asian emerging markets, growth was slightly higher than in 2016, while India recorded a slight decline. Overall, economic growth in the region was roughly as strong as in the previous year. Growth in the Middle East slowed slightly, but increased somewhat in Africa.

Compared with 2016, sales (excluding Oil & Gas) at our companies located in the emerging markets rose by 13% to €16,853 million, largely as a result of significantly higher sales volumes and prices. Measured by customer location, we increased sales (excluding Oil & Gas) in the emerging markets by 15% to €21,496 million. This brought sales to customers in emerging markets to around 35% of total sales (excluding Oil & Gas) in 2017. In the years ahead, we want to continue expanding this percentage based on past and future investments.

Sales3 in emerging markets
Sales in emerging markets (bar chart)

3 Percentage of BASF Group sales (excluding Oil & Gas) by location of customer