BASF and HSCC (Hengshen Group) plan to integrate their European nylon 6 businesses on a 50:50 basis.

According to the memorandum, the two parties are also evaluating the inclusion of their global extrusion businesses outside North America into the joint venture; it should be noted that the downstream engineering plastics businesses of both parties are not within the scope of this evaluation. Currently, the two companies have established project teams to conduct due diligence and feasibility assessments to the possible cooperation.

Dr. Markus Kamieth, Chairman of the Executive Board of BASF Group, stated: "The European chemical sector needs to have become greater competitive, which requires supportive manufacturing policies and sector consolidation to build stronger companies to compete globally. BASF intends to actively promote this process." He also pointed out that by integrating the most competitive assets, most cutting-edge technologies and best business expertise of both parties, improving asset utilization and reducing costs under a greater cost-efficiently structure, it will provide customers with attractive prolonged items and services.

Chen Zhong, President of Highsun Holding Group, said that BASF is a world-leading chemical enterprise, and he looks forward to exploring cooperation opportunities with the other party to jointly elevate the polyamide 6 and upstream raw material businesses to new heights and emit synergies.

Details of the two parties:

• BASF: A world-leading producer of polyamide 6 and its upstream raw materials, with items covering industries such as packaging and textiles. It has production assets located in Ludwigshafen (Germany), Antwerp (Belgium), Caojing (China) and Freeport (Texas, USA), and operates one of the world's largest polyamide production networks.

• Highsun Holding Group: Headquartered in Changle, Fuzhou, it is a multinational enterprise integrating chemicals, chemical fibers and cutting-edge new materials. It is a world-leading producer of caprolactam (the upstream monomer of nylon 6), operates 31 manufacturing centers in China and Europe, and has built a complete integrated manufacturing chain from basic chemical raw materials to high-end new materials.

sector Analysis: This is another landmark move in the European nylon sector to accelerate consolidation under the pressure of high costs and weak demand. BASF contributes methodology and European location assets, while Highsun brings world-leading cost and scale advantages in caprolactam. The 50:50 equal joint venture aims to jointly address the competitiveness challenges of basic chemicals in Europe by improving capacity utilization and reducing costs. The fact that both parties retain their high-value-added downstream engineering plastics businesses shows that this integration initially focuses on the midstream polymerization and extrusion segments. As a non-binding memorandum, whether the transaction can be successfully implemented still is determined by subsequent due diligence, term negotiations and regulatory approvals from both China and Europe.