German chemical giant BASF SE (BASFY.PK,BFA.L) Tuesday said it aims sales of 25 billion euros in Asia Pacific region by 2020, as part of implementing its global strategy "We Create Chemistry." The company plans to invest 10 billion euros in the region, to create around 9,000 new jobs, and annual savings of 1 billion euros in the period.
BASF noted that it's Asia-Pacific strategy 'grow smartly' targets around 25 percent of its global R&D to be conducted in Asia-Pacific by 2020. It plans to reach a total of around 3,500 R&D personnel in the region, up from around 800 in 2012. The company said it will conduct around one quarter of its global research activities from Asia Pacific.
Martin Brudermüller, vice chairman of the board of executive directors of the firm said, "In the next decade, Asia Pacific will face huge challenges while remaining the fastest growing market for the chemical industry. With our Asia Pacific strategy, we are positioning BASF as the leading provider of sustainable solutions for the Asia Pacific region."
Brudermüller, who is responsible for Asia-Pacific stated that the company will considerably strengthen its innovation capabilities in the region. The firm plans to achieve more than 2 billion euros in regional sales through new business and acquisitions by 2020.
By 2020, BASF aims for local production of nearly 75 percent of the products it sells in the Asia-Pacific region, and plans to invest 10 billion euros, together with its partners.
For Asia-Pacific, BASF estimates cumulative annual growth rate for real chemical production through 2020, to be 6.2 percent, up from the world average of 4.0 percent. It also intends to grow profitably at least two percentage points above regional chemical production, to achieve its sales target of 25 billion euros.
In addition, BASF said it will explore untapped markets in Mongolia, Laos, Myanmar, and Cambodia.
As part of its efficiency measures, the company aims to save about 1 billion euros annually through 2020. The measures include expansion of its regional technical and engineering procurement hub.
In April end, the firm reported a decline in first-quarter profit, despite about 5 percent growth in sales. Results reflected lower sales volumes in Construction Chemicals division due to adverse weather conditions and earnings for the segment were down, as a result of lower contribution from Catalysts division.
On Frankfurt's Xetra, BASF shares are currently trading at 73.45 euros, down 1.09 percent.
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