A few days before the opening of a new chemical plant in China, BASF boss Kamieth admits that this billion-dollar investment will pay off for the company later than planned.
“We are starting in an oversupplied market in which prices and margins are at a historically low level,” Kamieth told the “Frankfurter Allgemeine Sonntagszeitung”. “Profitability in the first few years will therefore be significantly below what we originally imagined.”
In principle, Kamieth defended the decision to build the new plant. Not even geopolitical risks such as the threat of war over Taiwan changed this. “If we stop investing in China, we will withdraw from half of the world market. For me, this scenario is significantly riskier than investing in China,” said the BASF boss. Regarding the consequences of the Iran war and the blockade of the Strait of Hormuz for BASF, Kamieth said: “The effects are currently still manageable. The Strait of Hormuz does not currently represent an immediate bottleneck for raw materials or global product sales for us.”
According to BASF, the new site in Zhanjiang in southern China, which is scheduled to open next Thursday, cost around 8.7 billion euros. It is the largest single investment in the company’s history. Nevertheless, according to Kamieth, nowhere else does the group invest as much money as at the main plant in Ludwigshafen. It will remain that way in the future. The new location is also not intended to replace recently shut down facilities in Ludwigshafen. “We don’t relocate anything to China,” said Kamieth.
/nas/stk
FRANKFURT (dpa-AFX)
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