BASF Raised 40 Billion Yuan in China

According to BASF news on November 23, BASF is taking advantage of China's current low interest rate environment to sign a syndicated term loan of RMB 40 billion with a term of 15 years for its new integrated base in Zhanjiang. The new factory is located in Guangdong Province and is currently under construction. The loan will be provided mainly by several major banks in China and will provide flexible repayment options to optimize BASF's cash utilization.

BASF is financing the new integrated base with approximately 20% equity and 80% debt. Dr. Dirk Elvermann, Chief Financial Officer of BASF SE, said: “By signing this bank term loan, BASF is implementing its strategy of using Chinese funds to finance the Zhanjiang project. BASF's financial strength and track record of strong sales and earnings growth in China allowed BASF to obtain attractive loan financing terms.”

“We have been impressed by the strong support for this project from the local banking market,” said Christian Jutzi, President of BASF Corporate Finance. “This underlines the confidence of our banking partners that our new integrated base will be a key platform for long-term profitability and sustainable growth.”

The Zhanjiang integrated base is a major investment by BASF, with an investment amount of up to 10 billion euros. The base will be fully operated by BASF and is BASF's third largest integrated base in the world after Ludwigshafen, Germany, and Antwerp, Belgium.

In 2018, BASF announced the construction of an integrated production base in Zhanjiang, Guangdong. The total investment is expected to reach 10 billion euros by 2030, which will be independently constructed and operated by BASF. This is not only BASF’s largest overseas investment project to date, but also the “first example” of a wholly foreign-owned enterprise in China’s heavy chemical industry. In September 2022, the first unit of the base was officially put into production. Lou Jianfeng said that in the next 5 to 10 years, BASF will continue to comprehensively promote the construction and operation of large-scale projects in China, more than half of which will be used for the construction of the integrated base in Zhanjiang, Guangdong.

Lou Jianfeng said that China accounts for half of the global chemical market, and the huge market growth potential has always been BASF's growth engine. In particular, China's economy is currently transforming towards high-quality development, which is bound to create more opportunities for BASF, which focuses on innovation and sustainable development.

After completion, the Zhanjiang integrated base will mainly include a steam cracking unit with an annual output of 1 million tons of ethylene, as well as multiple downstream product production units for the consumer market. By adopting cutting-edge technology, fully implementing smart production concepts and adhering to the highest safety standards, the base will become a model of intelligent and sustainable production.