Just days before the opening of a new chemical plant in southern China, BASF chief executive Markus Kamieth admitted that the multi‑billion‑euro investment would not pay off as quickly as the company had originally hoped.
“We’re entering an oversupplied market where prices and margins are at historically low levels” Kamieth told the “Frankfurter Allgemeine Sonntagszeitung”. “Profitability will therefore be significantly lower in the first years than we initially imagined”.
Despite this, he defended the decision to build the new facility. Geopolitical risks-including the threat of a Taiwan conflict-did not deter the project. “If we stop investing in China, we’re withdrawing from half of the global market” he said. “For me, that scenario is far riskier than continuing to invest in China”.
Regarding the Iran war and the blockade of the Strait of Hormuz, Kamieth said: “So far, the impacts are still manageable. The Strait of Hormuz does not pose an immediate bottleneck for our raw‑material supply or global product distribution”.
The new site in Zhanjiang, scheduled to open next Thursday, cost approximately €8.7 billion, the largest single investment in the history of the 1865‑founded company.
When asked about the company’s investment strategy, Kamieth emphasized that, in the long run, BASF is investing just as heavily-if not more-at its flagship site in Ludwigshafen. That focus will remain unchanged in the future. He also clarified that the new Chinese location is not meant to replace recently shuttered plants in Ludwigshafen. “We are moving nothing to China” he affirmed.