Segment Profile

Divisions

Petrochemicals

Broad portfolio of high-quality basic chemicals and specialties tailored to the needs of internal and external customers that serve as starting materials for products such as dispersions, paints, coatings, plastics, insulating materials and hygiene products

Intermediates

Comprehensive portfolio of intermediates and specialties, which are used as precursors for products such as coatings, plastics, textile fibers, pharmaceuticals and crop protection products

Sales

Factors influencing sales

Income from operations before special items

Million €

How we create value – an example

ChemCycling^™
An innovative approach to recycling plastic waste

Value for the environment

Recycled raw materials used in the Verbund from 2025 onward

250,000 metric tons

Value for BASF and for our customers

Number of sales products using recycled raw materials

40 products

ChemCycling™ is a vital lever in creating a circular economy for plastics. The project covers plastic waste for which high-value processing is not yet available and makes it possible to produce virgin-grade chemical products from recycled feedstocks. At the same time, greenhouse gas emissions are lower than for conventional products made from primary fossil resources as the waste is no longer incinerated. In 2020, we processed around 1,000 metric tons of recycled raw materials in the Verbund, saving the same amount of fossil resources. We plan to successively increase the use of recycled feedstocks over the coming years. The ChemCycling™ project will play a significant part in achieving BASF’s target of using 250,000 metric tons of recycled and waste-based feedstocks annually from 2025 onward.

More information on ChemCycling^TM

As part of its ChemCycling™ project, BASF uses pyrolysis oil produced by partners from post-consumer plastic waste as a feedstock in its Verbund production. We manufacture virgin-grade plastics from the pyrolysis oil according to a mass balance approach. Currently, BASF already has 40 independently certified sales products with an allocated share of recycled raw materials in its portfolio. These products have the same properties as those produced from fossil raw materials. This means that our customers can process them in the same way as conventionally produced products and use them in demanding applications such as food packaging or automotive parts. Our customers commercially marketed the first applications based on chemically recycled plastic waste in 2020.

Strategy

• Integrated production facilities form core of Verbund
• Technological leadership and operational excellence provide most important competitive edge

The Chemicals segment is at the heart of the Verbund. Its production facilities supply BASF’s segments with basic chemicals and intermediates to produce higher value-added products. In this way, the segment makes a significant contribution to BASF’s organic growth. The Chemicals segment is also a reliable supplier and provides chemicals of consistently high quality and markets them to customers in downstream industries.

We create value through process and product innovation and invest in research and development to implement new, sustainable technologies and to make our existing technologies even more efficient. Technological leadership, operational excellence and a clear focus on individual value chains are among our most important competitive advantages. We concentrate on the critical success factors of the classic chemicals business: leveraging economies of scale and the advantages of our Verbund, high asset reliability, continuous optimization of access to raw materials, lean and energy efficient processes, and reliable, cost-effective logistics. Furthermore, we are constantly improving our global production structures and aligning these with regional market requirements. We continuously improve our value chains and are expanding our market position – especially in Asia – with investments and collaborations in growth markets.

There is continued focus on the construction of an integrated Verbund site in Zhanjiang in the southern Chinese province of Guangdong.

As part of a memorandum of understanding signed in October 2019, the Abu Dhabi National Oil Company, the Adani group, BASF and Borealis AG have completed a joint feasibility study for a chemical complex in Mundra, India. The global economic uncertainties caused by the coronavirus pandemic led the partners to put the project on hold in November 2020. The partners remain convinced of the strong fundamentals represented by the Indian market and have agreed to re-examine market conditions in the future.

In our existing 50:50 joint venture BASF-YPC Company Limited (BYC) in Nanjing, China, BASF and Sinopec plan to further expand the site to strengthen the joint production of chemical products in China. In addition, in 2020 we increased the production capacity for neopentyl glycol at the Nanjing site to further support the growth of our customers in China. Strategically, we continue to invest in growth markets, such as the planned expansion of production capacities for tertiary butylamines in Nanjing, China, by 2022.

At our Verbund site in Antwerp, Belgium, we are expanding our ethylene oxide plant. The project also includes several downstream plants, for example, to produce surfactants. After completing the multi-stage startup process for the new, highly efficient acetylene plant in Ludwigshafen, Germany, we have improved our competitiveness and strengthened the product line’s sustainability.

As part of the global optimization of production structures, BASF Idemitsu Co. Ltd, a joint venture between BASF and Idemitsu Kosan Co. Ltd., closed a production plant for butanediol in Chiba, Japan, in 2020. Another butanediol plant operated by our joint venture BASF Petronas Chemicals Sdn. Bhd. in Kuantan, Malaysia, will be closed in 2021.