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BASF Increases Chinese, Malaysian Capacity as Asian Demand Rises

BASF SE (BAS) Deputy Chief Executive Officer Martin Brudermueller said the chemical industry will draw most of its growth from Asia in coming years, underscoring the role of emerging markets for the German company.

BASF, which won approval in March for a plant in Chongqing in the west of China, expects global chemical demand to expand by 1.1 trillion euros ($1.5 trillion) until 2020, with Asia accounting for 700 billion euros of that amount, Brudermueller said in a Bloomberg TV interview in Hong Kong, where he has been based for five years.

BASF and joint venture partner China Petroleum & Chemical Corp., known as Sinopec, are expanding a flagship Asian Verbund site in Nanjing, China, where the companies will have 30 integrated factories, Brudermueller said. The Ludwigshafen, Germany-based chemical maker is also expanding its production in Kuantan, Malaysia, he said. The company said this month it’s on course to double sales in the Asia-Pacific region by 2020, based on revenue of 9 billion euros in 2008.

“It’s exactly the right moment to emphasize how important Asia Pacific is for the growth of BASF,” Brudermueller said. “There are a lot of big investments out here, a lot of opportunities that need to be shaped. And I think it’s important to stay out here.”

The factory in Chongqing, expected to start operations in 2014, will produce diphenylmethane diisocyanate, or MDI, used in polymers for coatings and adhesives. BASF invested 860 million euros in the site, which is wholly owned by the German company, Brudermueller said.

To contact the reporters on this story: Robyn Meredith in Hong Kong at rmeredith8@bloomberg.net; Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net.

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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