Material Investments and Portfolio Measures

Investments are a key driver of profitability for our targeted growth. To achieve our climate targets, we are also making targeted investments in modern and more sustainable technologies and processes. Our growth projects play a central role, particularly the new Verbund site in Zhanjiang, China, which we are planning from the outset as a pioneer for sustainability. 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 2024 to 2027, we are planning capital expenditures (capex)¹ totaling €19.5 billion, including €6.8 billion for our growth projects.²

• More information on our investments from 2024 onward

We continued to drive forward our growth projects in 2023 and further expand our position in our three key regions: Asia Pacific, North America and Europe. The Asia Pacific region and China in particular, which already has a significant influence on the growth of the global chemicals market with a share of around 50%, 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. One example of this is the construction of our new integrated Verbund site in Zhanjiang (see below). In North America, among other things, we have been further expanding our production capacities in the isocyanates value chain in 2023 (see below ). In Europe, the opening of the first colocated battery materials and recycling center at the Schwarzheide site in Germany was a milestone on our way to further expanding our position in this area (see below).

In addition, we want to refine our portfolio through smaller, bolt-on acquisitions that promise above-average profitable growth and help to expand our market position in a targeted manner. A key consideration is that these acquisitions are innovative, 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 €5,864 million in 2023 (2022: €4,842 million). Capex accounted for €5,198 million of this amount (2022: €4,148 million). Our investments in 2023 focused on the Chemicals, Materials, Surface Technologies and Nutrition & Care segments.

Additions to property, plant and equipment^a by segment in 2023

Additions to property, plant and equipment^a by region in 2023

Chemicals

Strategically, our investments concentrate on growth markets such as China to support the growth of our local customers. In 2023, we completed the further expansion project of the Verbund site in Nanjing, China, together with our partner Sinopec, to strengthen the joint production of chemical products in China. This means that we have increased our production capacities for propionic aldehyde, propionic acid and purified ethylene oxide. We also built a new tert-butyl acrylate plant. These new and expanded plants came onstream in 2023.

We are continuing the construction of the new Verbund site in Zhanjiang in the southern Chinese province of Guangdong. The site will be constructed in several phases. The core of the Verbund, including a steam cracker and several downstream plants for the production of petrochemicals and intermediates, among other products, is currently being built. As part of the Verbund, these plants should be operational from late 2025 onward.

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

In 2023, we successfully completed the expansion of our production complex for ethylene oxide and derivatives, for example for the production of alkoxylates, at our Verbund site in Antwerp, Belgium. A world-scale alkylethanolamines plant is scheduled for startup there in 2024.

Materials

In the Materials segment, the expansion of the methylene diphenyl diisocyanate (MDI) plant in Geismar, Louisiana, is continuing as planned with the third and final expansion phase. It 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.

We started up the engineering plastics production plant at our Verbund site in Zhanjiang, China, in August 2022. Building on this, the thermoplastic polyurethane (TPU) plant kicked off its operations in September 2023. This plant is BASF’s largest TPU production line globally. It will enable us to better meet the growing market demand in Asia Pacific – particularly in the areas of electromobility and new energy.

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

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 multistep investment plan, BASF aims to serve the growing demand for light stabilizers used in durable plastics applications and increase supply security for customers worldwide.

In addition, we have invested in the production of water-based anode binders in two existing dispersion plants in Huizhou and Zhenjiang, China. Stable supply of two new innovative binder products, Licity^® and Basonal^® Power, came onstream in mid–2023. The investment was due to growing demand in the lithium-ion battery market.

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. It will startup in 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. In June 2023, we opened Europe’s first colocated battery materials and recycling center at the Schwarzheide site in Germany. The inauguration of the modern production plant for high-performance cathode active materials,¹ the battery recycling prototype plant¹ (startup: beginning of 2024) and the battery recycling plant for the production of black mass from lithium-ion batteries currently under construction (planned startup: 2024) represent important steps toward closing the loop for the European battery value chain. End-of-life batteries and waste from battery production will be mechanically processed in the new plant to produce black mass. 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. The construction of our production facility in Harjavalta, Finland, was completed in 2023, which will supply precursors for cathode active materials.² With these investments, BASF is 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.

Nutrition & Care

In 2023, BASF started up the new world-scale vitamin A formulation plant in Ludwigshafen, Germany. The plant’s startup followed the expansion of the vitamin A acetate plant in 2021 in order to meet the expected growing market demand for high-quality vitamin A.

In Antwerp, Belgium, BASF expanded production capacities for nonionic surfactants for the home care industry as well as for industrial and institutional cleaning applications by significantly extending the industry-leading alkoxylates portfolio at its Verbund site. This investment expands upstream production capacity for ethylene oxide and ethylene oxide derivatives.

BASF has invested in a citral plant as part of its Verbund site in Zhanjiang, China, and menthol and linalool downstream plants at its Verbund site in Ludwigshafen, Germany. These plants are expected to come on stream from 2026 onward. The investment is driven by a growing demand from the global flavor and fragrance market.

Agricultural Solutions

In the Agricultural Solutions segment, we continue to invest in the traceability of crop protection products based on digital identification as well as in the reduction of CO₂ emissions and organic waste streams in our plants, in Europe. Furthermore, in 2023, we started construction of a fermentation facility for biological and biotechnology-based crop protection products in Ludwigshafen, Germany. Startup is scheduled for the second half of 2025. In Beaumont, Texas, and Hannibal, Missouri, we continue to modernize our site infrastructure.

• More information on our segments

Acquisitions

We did not make any major acquisitions in the 2023 business year.

Divestitures

The divestiture of BASF’s nickel-based catalysts production site in De Meern, Netherlands, to IQatalyst B.V., a subsidiary of ASC Investment Sarl, Luxembourg, which had been announced in July 2022, was closed on August 31, 2023. BASF had decided to divest the site and the related Fischer-Tropsch and FOCAT³ portfolio to increase the efficiency of its global chemical catalysts production network. The site was part of BASF’s Catalysts division until the completion of the divestiture process. The transaction mainly covered production plants, including the associated infrastructure and inventories, as well as the transfer of the employees working at the site.

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

Agreed transactions

On December 21, 2023, BASF, LetterOne and Harbour Energy plc (Harbour) signed an agreement to combine the businesses of Wintershall Dea and Harbour. The E&P business of Wintershall Dea is to be transferred to Harbour: It comprises production and development assets as well as exploration rights in Norway, Argentina, Germany, Mexico, Algeria, Libya (excluding Wintershall AG), Egypt and Denmark (excluding Ravn), and licenses from Wintershall Dea for carbon storage (CCS). In exchange, at closing, the shareholders of Wintershall Dea will receive total cash consideration of $2.15 billion (BASF share: $1.56 billion) and new shares to be issued by Harbour equating to a total shareholding in the enlarged Harbour of 54.5% (BASF share: 39.6%).

Until the completion of the transaction, which is, among other things, subject to antitrust approvals and further official approvals for foreign investments in various countries, among other things, Wintershall Dea and Harbour will continue to operate as independent companies. Subject to these regulatory approvals, closing is targeted for the fourth quarter of 2024.

Wintershall Dea is accounted for as a non-integral shareholding using the equity method. After completion of the transaction, both the shareholding in Wintershall Dea, which will then only include the businesses not transferred to Harbour and the head offices, and the shareholding in Harbour will be accounted for using the equity method in the Consolidated Financial Statements of the BASF Group.

• For more information on this divestiture, see Non-Integral Oil and Gas Business