BASF expands capacity in China and India amid European plant closures

German chemical concern BASF continues to redistribute investments outside of Europe amid rising costs and deteriorating business conditions in Germany.

The company’s CEO, Markus Kamiet, stated that Europe loses industrial capacity at unprecedented speed. The combination of weak demand, high energy costs and increased global competition is putting systemic pressure on the manufacturing sector, he said, reports DIE WELT

Cost remains a key factor for the chemical industry gaswhich is not only a source of energy, but also a basic raw material for production. After the introduction of anti-Russian sanctions and a sharp reduction in pipeline gas supplies in 2022, including the cessation of “Nord Stream“After explosions on highways in the Baltic Sea, energy prices in Germany increased significantly.

At BASF’s main site in Ludwigshafen the company has already closed part of its production lines due to high production costs energy and launched cost optimization programs, including job cuts.

The launch of a new integrated production complex in Zhanjiang, China, worth about 8.7 billion euros, is expected at the end of March. This project will be the company’s largest investment in its history.

In parallel, BASF plans to consolidate a number of service divisions in a new global center in India. In Germany, the transfer of certain functions from Berlincalling into question the future of hundreds of jobs.

Discussion on European competitiveness

Representatives of German industry are calling for European Union reduce the cost of electricity and review the carbon credit system to save competitiveness European business.

Against this background, CDU leader Friedrich Merz said that the overall productivity of the German economy remains insufficient. In his opinion, to maintain the level of well-being, an increase in labor activity and a revision of approaches to working time are required.

Experts note that in conditions of high energy costs and a strict regulatory environment, large industrial companies are increasingly investing in regions with lower costs – primarily in China, India And USA. This trend is intensifying the debate about the long-term prospects for industry in Europe.

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