Heavy! BASF Zhanjiang base completed mechanical completion and put into full operation by the end of 2025

Capacity release: the supply chain significance behind the promise of early delivery.

On August 11, 2025, the butyl acrylate unit of BASF Zhanjiang Integration Base was put into operation ahead of schedule, with a designed annual production capacity of about 400000 tons. The early realization of this time node released three signals: first, the zero safety accident record showed the high standard of project implementation; Secondly, the first batch of products were delivered by tank truck on August 17, proving that the production capacity has entered substantial commercial operation. Third, for downstream industries such as adhesives, industrial coatings and architectural coatings, this means that the Asia-Pacific region has an additional reliable source of large-scale supply.

What is more noteworthy is the overall progress: the ethylene unit and its downstream full-chain units (ethylene oxide, oxo synthetic alcohol, synthesis gas, high-density polyethylene) have been mechanically completed and officially transferred to the operational preparation stage. Full commissioning and commissioning by the end of 2025 will make this project with a total investment of 8.7 billion euros (13% optimized from the original plan of 10 billion euros) the largest single investment by BASF in the Asia-Pacific region. The core value of this "integrated" layout lies in raw material self-sufficiency and cost synergy-vertical integration from upstream petrochemical raw materials to downstream fine chemicals will significantly reduce dependence on external suppliers and enhance profitability in a volatile price environment.

Profit logic: the path to the 10-1.2 billion euro target

BASF Executive Board Chairman Kaili made it clear that the adjusted EBITDA of the Zhanjiang base is expected to reach 1 billion to 1.2 billion euros by 2030. This expectation is based on three support points:

demand side the growing demand for high-quality petrochemicals in the Asia-Pacific market, especially the rapid expansion of China and neighboring countries in the fields of new energy vehicles, high-end manufacturing, and infrastructure construction, has provided sufficient space for product sales.

Cost end: Scale effects and energy efficiency advantages of an integrated base. The Zhanjiang base adopts BASF's most advanced technology to reduce unit production costs through comprehensive utilization of heat energy and by-product recycling, and occupies a favorable position in the global chemical production capacity competition.

Strategic end the base is clearly positioned as a core business in BASF's "Winning Youdao" strategy and will receive continuous capital investment and technology upgrade support. It is worth noting that BASF lowered its global fixed asset investment forecast for 2025-2028 from 17 billion euros to 16 billion euros, but the Zhanjiang project schedule was not affected, reflecting its strategic priorities.

Strategic Transformation: The Impact of Portfolio Restructuring on the Market

the core of BASF's strategy, launched in September 2024, is to divide the business into core businesses (chemicals, materials, industrial solutions, nutrition and care) and autonomous businesses (environmental catalysts and metals, battery materials, coatings, agricultural solutions). This classification management model means differentiated cooperation expectations for supply chain partners:

core Business priority resource allocation will be obtained. The chemicals and materials sector, where the Zhanjiang base is located, is expected to increase revenue by about 0.4 billion euros by 2028 through measures such as closing loss-making factories and starting new projects. In terms of cost control, BASF expects to save 1.6 billion euros per year by the end of 2025 (exceeding the original 1.5 billion target), which will directly translate into price competitiveness.

autonomous business faced with strategic choices. Environmental catalysts and metal solutions (sales of 7 billion euros in 2024) will remain for a longer period of time; Agricultural solutions (9.8 billion euros) plan to list minority shares in 2027; The coating business (3.8 billion euros) is exploring strategic options and a final decision is expected to be made in the fourth quarter of 2025. Battery materials (0.6 billion euros) have greatly reduced fixed costs and signed agreements with customers such as Ningde Times to fill capacity. The potential divestiture or restructuring of these businesses will reshape the competitive landscape of the relevant market segments.

Implications for market participants

BASF's layout sends a clear signal that global chemical giants are accelerating their resources towards Asia-Pacific and establishing regional supply dominance through large-scale integration projects. For downstream buyers, the opening of Zhanjiang base will improve the balance of supply and demand, but it may also intensify competition in the region; for competitors, this investment scale and technical threshold set new entry standards; for traders, it is necessary to pay close attention to the supply chain changes and cooperation opportunities brought about by BASF's asset portfolio adjustment.

In terms of financial commitments, BASF plans to pay a dividend of at least 2.25 euros per share (totaling about 8 billion euros) per year in 2025-2028 and to buy back at least 4 billion euros of shares in 2027-2028. This strength of shareholder returns, as well as the decision to initiate the repurchase program early, reflects management's high confidence in future cash flows and profitability. As an important support point of this confidence, the operational performance of the Zhanjiang base will directly affect the supply pattern of the Asia-Pacific chemical market in the next 5-10 years.