July 9, 2018 / 2:13 PM / 4 months ago

BASF signs MoU for fully-owned chemical site in China

Martin Brudermueller, Chairman of the Board of Executive Directors and Chief Technology Officer (CTO), BASF SE attends German-Chinese Forum for economic cooperation in Berlin, Germany, July 9, 2018. REUTERS/Fabrizio Bensch

FRANKFURT (Reuters) - BASF (BASFn.DE) is considering building a chemical production site in the South Chinese province of Guangdong, which the German chemicals group said would be its first wholly-owned plant in China.

China unveiled only last month a long-anticipated further easing of foreign investment curbs as Beijing moved to fulfill its promise to open its markets further.

BASF Chief Executive Martin Brudermueller and a Guangdong representative on Monday signed a Memorandum of Understanding for the construction of the $10 billion site, which could employ 2,000 staff plus 1,000 external contractors by completion in 2030.

The deal came as Chinese Prime Minister Li Keqiang and German Chancellor Angela Merkel met in Berlin on Monday, with the trade conflict between Europe, China and the United States was high on the agenda.

The integrated chemicals complex in Guangdong would be BASF’s largest investment ever and would ultimately be its third-largest site after its headquarters in Ludwigshafen, Germany, and Antwerp, Belgium.

BASF is the only major Western chemicals player banking on an integrated value chain - which it dubs “Verbund” - where a company owns businesses throughout the production process.

The Guangdong site would initially have petrochemical plants and a steam cracker producing ethylene. Eventually, products for the consumer goods and transportation sectors would be made there, BASF said.

Reporting by Arno Schuetze; Editing by Maria Sheahan

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