Material Investments and Portfolio Measures

Portfolio management is an important part of our new strategy. Investments remain a key driver of our targeted profitable growth as well as our green transformation. Our focus is on high-growth markets. The establishment of a new Verbund site in Zhanjiang, China, which we have designed from the outset as a pilot project for sustainability, contributes to achieving these aims.

The primary aim of our portfolio measures and investments is to empower the core businesses and increase and more clearly emphasize the value of the standalone businesses. Investing in our plants is essential to achieve the profitable growth we strive for in our core businesses. We invest in new technologies in order to facilitate our own green transformation and that of our customers. At the same time, we are taking measures to increase the efficiency of existing production processes and therefore to improve the profitability and competitiveness of our operations. For the period from 2025 to 2028, we are planning capital expenditures (capex)¹ totaling around €16 billion, including approximately €3 billion for the establishment of our Verbund site in Zhanjiang, China. Due to the investments in the Verbund site in Zhanjiang, our capital expenditures peaked at around €6 billion in 2024. We anticipate a slight decrease to around €5 billion for 2025. Starting in 2026, we are planning to reduce capital expenditures to well below the level of depreciation and amortization (for more information on our future investments, see Capital expenditures).

We drove forward our investment projects in 2024, focusing on the expansion of our position in our three key and attractive 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 remain especially attractive. We expect that around 80% of growth in the chemical industry will be concentrated in this region by 2035. In order to participate in this and to serve the increasing demand from various growth industries in this region, we are establishing, for example, our new integrated Verbund site in Zhanjiang (see table below). Our focus is on getting the Verbund site operational as planned, with the cornerstones of the Verbund structure scheduled for completion in 2025. This site will already be operated using 100% renewable electricity starting 2025. We also continuously invest in the ongoing development of our other Asian sites, such as our expansion project in Kuantan, Malaysia, in tandem with our partner PETRONAS Chemicals Group Berhad (see table below).

In North America, our focus is on the expansion of our production capacities in the isocyanates value chain in Geismar, Louisiana (see table below). The project is on schedule and is set for startup in 2026. Our production capacity for methylene diphenyl diisocyanate (MDI) in North America will thereby rise from 380,000 metric tons per year to around 600,000 metric tons per year. The MDI expansion represents BASF’s largest single investment in North America.

In addition, we invested in our European sites. In 2024, we put a world-scale production plant for alkyl ethanolamines into operation at our Verbund site in Antwerp, Belgium, thus expanding our global production capacities for this product and its derivatives by almost 30%. In Ludwigshafen, Germany, we continued to drive forward our chlorine and aroma projects among other things (see table below). In Ludwigshafen, we also completed the world’s first electrically heated steam cracker demonstration plant in 2024. In Schwarzheide, Germany, we put our prototype metal refinery for battery recycling into operation.

We want to expand and refine our portfolio through value-increasing acquisitions, especially in our core businesses. We will expand our regional presence in growth markets in a targeted manner and support our green transformation through sustainable business models.

Investments in the segments and regions

Investments in property, plant and equipment amounted to €6,506 million in 2024 (2023: €5,864 million). Capex accounted for €5,996 million of this amount (2023: €5,198 million). Our investments in 2024 focused on the Chemicals, Materials and Nutrition & Care segments.

Additions to property, plant and equipment^a by segment in 2024

Additions to property, plant and equipment^a by region in 2024

Acquisitions

In April 2024, Vattenfall and BASF contractually agreed on the purchase of 49% of shares in Vattenfall’s Nordlicht 1 and 2 wind farm projects by BASF (for more information, see Note 3 to the Consolidated Financial Statements). The Nordlicht wind farm projects are being built in the German North Sea without government subsidies and will have a total installed capacity of 1.6 gigawatts. BASF will use just under half of the electricity generated to supply its chemical production sites in Europe, particularly Ludwigshafen, Germany. Subject to the final investment decision, which is expected in the course of 2025, construction of Nordlicht 1 and 2 is scheduled to begin in 2026. The wind farms are scheduled to become fully operational in 2028.

Divestitures

Following agreement on the sale of Wintershall Dea’s exploration and production (E&P) business, excluding Russia-related activities, to Harbour Energy plc, London, United Kingdom, in December 2023, this transaction was concluded on September 3, 2024. The E&P business consists of production and development assets, as well as exploration rights and Wintershall Dea’s carbon storage licenses. In exchange, Wintershall Dea shareholders – BASF (72.7%) and LetterOne (27.3%) – received a cash consideration totaling $1.78 billion (BASF share: $1.29 billion), including a purchase price adjustment, and new shares issued by Harbour Energy equating to a total shareholding of 54.5% in the enlarged Harbour Energy company (BASF share: 39.6%).

Since completion of the transaction, both the shareholding in Wintershall Dea, which now only comprises the operations not transferred to Harbour Energy and the headquarters, and the shareholding in Harbour Energy have been accounted for as non-integral shareholdings using the equity method in the Consolidated Financial Statements of the BASF Group (for more information, see Note 3 to the Consolidated Financial Statements).

Agreed transactions

On December 21, 2024, BASF and Louis Dreyfus Company (LDC), Rotterdam, Netherlands, signed an agreement on the sale of BASF’s operations in food and health performance ingredients, including the production site in Illertissen, Germany, to LDC. Under the terms of the agreement, it is expected that approximately 300 employees will transfer from BASF to LDC on completion of the transaction, which remains subject to the customary closing conditions, including approval by the relevant regulatory bodies.