Although there are some doubts about the growth momentum of corporate dependence on China, if the BASF company wants to maintain growth, there is almost no other choice except for investing in China.
According to the Dow Jones News Agency, by 2030, China will become the third largest comprehensive base in the German chemical company.The comprehensive facility is located in Guangdong Province, with a cost of up to $ 10 billion (the same, S $ 13.5 billion), and is currently under construction.At the same time, Russia's war in Ukraine has hindered Europe's competitiveness. In addition, this war has also increased the pressure on this war on Europe's economic dependence on China.
European bank analyst Bre said that the problem faced by BASF is whether the company can eventually bear the consequences of investing in this investment.
The reason why Bascus bets on China is because China has increased its role in promoting the growth of chemical industry.According to BASF's forecast, by 2030, China will reach 68%of the growth rate of world chemical production. By 2029, the amount will reach US $ 3 trillion in the global chemical industry with a total amount of US $ 5.6 trillion.
Brey said that sales from the Chinese market accounted for about 15%of BASF's total sales, but the company did not have enough contact with China's growth opportunities.Brey also said that BASF's investment in Guangdong may generate 4 billion to 5 billion euros (about 5.7 billion to 7.2 billion yuan) after operation.He said that despite the risk of the Chinese market, it must be part of the consideration of BASF's investment strategy.
Brey said that building this factory is a way for BASF to expand in the Chinese market. It is expected that most of the global chemical industry market demand will come from the Chinese market.The business is open.
Reported Schwartz, an analyst of the German Bank of Germany M. M. Warburg, said that the attractiveness of the European continent has declined because the Russian and Ukraine War made Europe unable to obtain the cheap and natural gas of Russia, and the development of BASF relied on Russia's natural gasAs energy and raw materials.
Natural gas shortage and high energy prices have brought a heavy price.German Bank analyst Heman said in a research report that in October 2022, the production of the German chemical industry decreased by nearly 23%compared with the fourth quarter of 2021, the lowest level since the 2008 financial crisis.
Just this month, BASF announced that it would permanently reduce European business costs and launched a cost reduction plan, which saved 500 million euros for the company each year from 2024.
Schwartz said: "The situation is becoming more and more severe. In the next two to three years, we will see the decline in European profits. We will see that investment in Europe is reduced.More attractive overseas markets will increase investment. "
He also said that it seems that China's importance to BASF will definitely rise, but the company will not put all eggs in a basket in a basketinside.
Schwartz said that BASF is not yet ready to invest in the construction of a new plant or expand existing factories far exceeding US $ 10 billion, especially considering the current political situation in China, from the situation in the Ukraine situation, it will be obtained from the situation of the Ukraine situation.The lesson is that the development of the political situation is unpredictable, and you will not want to fall into a dilemma.
Brey said that he can understand the reason for investing in China, but BASF seems to have no way to hedge related geopolitical risks for $ 10 billion in large -scale investment.
He said that a question that many investors are asking is that if the dispute between the Taiwan Strait becomes a military conflict one day, or the US -China relations further deteriorate, can BASF be reliable from its investment in Guangdong's investment in Guangdong.Get value.
