Material Investments and Portfolio Measures

Investments are an essential building block for driving our growth and at the same time, achieving our climate targets. That is why we make targeted investments in modern and more sustainable technologies and processes. Our major growth projects help us to reach this goal. We are continuously optimizing our portfolio through targeted acquisitions and divestitures.

By investing in our plants, we create the conditions for the profitable growth we strive for and continuously improve the efficiency of existing production processes. Investments in new technologies and in the transformation of our energy supply will help to achieve our growth targets and our ambitious climate targets. For the period from 2023 to 2027, we are planning capital expenditures (capex)¹ totaling €28.8 billion, including €13.6 billion for our major growth projects.²

• More information on our investments from 2023 onward

We continued to drive forward our major growth projects in 2022 and further expanded our position in our three key regions: Europe, Asia Pacific and North America. The Asia Pacific region and China in particular, which is expected to expand its share of the global chemical market to well over 50% by 2030, will continue to play a key role here. To serve the increasing needs of various growth industries in this region, we are continuously expanding our market position in China, for example, with the construction of our new smart Verbund site in Zhanjiang in the southern Chinese province of Guangdong (see below). In North America, we further expanded our production capacities in the isocyanates value chain in 2022, for example (see below). We also continued to invest in Europe, especially in our battery materials business in Schwarzheide, Germany, and Harjavalta, Finland (see below).

In addition, we are refining our portfolio through acquisitions that promise above-average profitable growth and help to expand our market position in a targeted manner. A key consideration is that these are innovation-driven, offer a technological differentiation, or make new, sustainable business models possible.

Investments in the segments and regions

Investments in property, plant and equipment amounted to €4,842 million in 2022 (2021: €4,078 million). Capex accounted for €4,148 million of this amount (2021: €3,363 million). Our investments in 2022 focused on the Chemicals, Materials, Surface Technologies and Nutrition & Care segments.

Additions to property, plant and equipment^a by segment in 2022

Additions to property, plant and equipment^a by region in 2022

Chemicals

Strategically, our investments concentrate on the growth markets like China to support the growth of our local customers. In 2022, we moved forward with the further expansion of the site in Nanjing, China, together with our partner Sinopec to strengthen the joint production of chemical products in China. For instance, we are currently expanding our production capacities for propionic aldehyde, propionic acid, purified ethylene oxide, ethanolamines and ethyleneamines, and are building a new tert-butyl acrylate plant. The new and expanded plants are scheduled to come onstream in 2023.

We are building another Verbund site in Zhanjiang in the southern Chinese province of Guangdong. In July 2022, BASF granted final approval for construction. The site will be constructed in several phases. A steam cracker and several downstream plants for the production of petrochemicals and intermediates, among other products, are currently being built. As part of the Verbund, these plants should be operational from late 2025.

We are expanding the 2-ethylhexanoic acid plant in Kuantan, Malaysia, with our partner PETRONAS Chemicals Group Berhad. Startup is planned for 2024.

At our Verbund site in Antwerp, Belgium, we are significantly expanding our ethylene oxide plant. The project also includes several downstream plants, for example, to produce alkylethanolamines and surfactants. The expanded ethylene oxide capacities are scheduled to come onstream in 2023.

Materials

In the Materials segment, the expansion of the methylene diphenyl diisocyanate (MDI) plant in Geismar, Louisiana, continued as planned. The final expansion will increase production capacity to approximately 600,000 metric tons per year to support the growth of BASF’s North American MDI customers. Including the first and second phases, the investment volume totals around $1 billion.

The first plant at the smart Verbund site in Zhanjiang, China, started up in August 2022. It has a capacity of 60,000 metric tons of engineering plastics compounds per year, bringing BASF’s total capacity of engineering plastics in Asia Pacific to 420,000 metric tons. The new plant enables BASF to meet the growing demand from its customers, particularly in the automotive and electronics industries. The next startup in Zhanjiang is planned for 2023: a plant for the production of thermoplastic polyurethanes (TPU).

In Europe, BASF is investing in a new world-scale production plant for hexamethylenediamine (HMD) at the Chalampé site in France. The new plant, which is scheduled to start operations in 2024, will increase BASF’s annual HMD production capacity to 260,000 metric tons.

Industrial Solutions

At the Jurong site in Singapore, we expanded global production capacity for the antioxidant Irganox^® 1010. With the completion of the project in 2022, BASF can now better serve the growing demand from customers in Asia and the Middle East. In addition, BASF is investing in production capacity for hindered amine light stabilizers (HALS) at its sites in Lampertheim, Germany, and Pontecchio Marconi, Italy. As part of a multi-step investment plan, BASF aims to serve the growing demand for light stabilizers used in durable plastics applications and increase supply security for customers worldwide.

To ensure the supply of high-quality dispersions solutions for the South Asian market, we are expanding our dispersions capacities in Huizhou, China, with an additional production line. Startup is expected in the first half of 2024.

Surface Technologies

We aim to expand our position as a leading and innovative provider of battery materials and recycling solutions and expect to benefit from the strong growth in this market segment. A global, customer-focused production network for battery materials is crucial here. Construction of our production plant for cathode materials in Schwarz­heide, Germany, continued in 2022. It is scheduled to start commercial production in 2023. We are working on the integration of our production site in Harjavalta, Finland, which will supply pre­cursors for cathode active materials. The two plants will initially produce cathode active materials for around 20 gigawatt hours of cell capacity per year. With these investments in Finland and Germany, BASF aims to become the first cathode active materials supplier with local production capacities in all of what are currently the main markets: China, Japan, North America and Europe.

In addition, the construction of our new battery recycling prototype plant in Schwarzheide continued on schedule in 2022. Startup is planned for 2023. The prototype plant will allow for the development of operating procedures and optimization of technology to deliver superior returns of lithium, nickel, cobalt and manganese from end-of-life lithium-ion batteries and unused process materials.

Nutrition & Care

The expansion of the vitamin A acetate plant in Ludwigshafen, Germany, was completed in 2021. BASF is now strengthening its market position for vitamin A for the animal nutrition industry with the expansion of its world-scale formulation capacities at its Verbund site in Ludwigshafen, which began in 2021. Startup is planned for mid-2023. We also invested in the expansion of alkoxylate capacities at the Verbund site in Antwerp, Belgium.

In the second quarter of 2022, BASF started up the new methane sulfonic acid plant at its Verbund site in Ludwigshafen. This increases BASF’s methane sulfonic acid capacities from 30,000 to 50,000 metric tons per year in response to growing cross-industry demand, strengthening its position as a leading global producer.

Agricultural Solutions

The investment in a formulation hub for crop protection products in Singapore, which started up in 2022, ensures that multiple formulation technologies are produced close to farmers in Asia Pacific. In North America, we continued to modernize site infrastructure and completed this on schedule. We are also investing in the traceability of agrochemicals based on digital identification in Europe. Further investments are being made to reduce CO₂ emissions and organic waste in our plants. Between 2023 and 2027, we plan to invest around €1 billion in developing and expanding our plants and infrastructure, including state-of-the-art R&D facilities, and in our production and formulation capacities for active ingredients as well as for seed solutions to meet our continuing high demand for our innovative solutions in the future.

• More information on our segments

Acquisitions

We did not make any acquisitions in the 2022 business year.

Divestitures

On April 12, 2022, BASF completed the sale of a 51% share in HKZ Investor Holding B.V., Arnhem, Netherlands, the holding company for the investment in the Hollandse Kust Zuid (HKZ) wind farm, to Allianz Capital Partners, Luxembourg, acting as party to the contract on behalf of Allianz Insurance Companies. BASF had acquired 49.5% of HKZ from Vattenfall in the third quarter of 2021. BASF will receive most of the power produced by its originally acquired share of 49.5% of HKZ under a long-term fixed-price power purchasing agreement.

• For more information on this divestiture, see Note 3 to the Consolidated Financial Statements

On September 30, 2022, BASF completed the divestiture of its kaolin minerals business to KaMin LLC./CADAM S.A., a global performance minerals company headquartered in Macon, Georgia. The divestiture comprised the production hub with sites in Daveyville, Toddville, Edgar, Gordon and related mines, reserves, and mills in Toomsboro and Sandersville in Georgia. The refinery catalysts operations located at the same site were not part of the divestiture. Until the divestiture, the kaolin minerals business was part of the Performance Chemicals division. The purchase price was €225 million.

• For more information on this divestiture, see Note 3 to the Consolidated Financial Statements

On October 31, 2022, BASF closed the divestiture of its Quincy, Florida site and corresponding attapulgite business to Clariant Corporation, Louisville, Kentucky. The Quincy site produces clay-based mineral products for a wide range of industrial applications. Until its sale, the site was part of the Dispersions & Resins division and employed around 75 people. The purchase price was $60 million.

Agreed transactions

On July 19, 2022, BASF and ASC Investment Sarl, Luxembourg, signed an agreement on the sale of BASF’s production site in De Meern, Netherlands, to ASC. The site produces nickel-based catalysts and is part of the Catalysts division. The transaction mainly covers production facilities, including the associated infrastructure and inventories, as well as the employees working at the site. The transaction is expected to close in the first quarter of 2023.

• For more information on this transaction, see Note 3 to the Consolidated Financial Statements