From May to June, BASF entered an intensive adjustment phase, shutting down its EPS plant in South Korea, selling its coatings business for €7.7 billion, exiting a 30-year joint venture with PetroChina, launching the internal transformation project CoreShift, and changing its Greater China leadership – more than seven major moves concentrated in this period.
01 Shutting Down Inefficient Capacity
On June 8, BASF officially closed its expandable polystyrene (EPS) production line at the Ulsan, South Korea, site, with production activities completely halted by mid-June.
EPS is a key downstream product of styrene. This closure follows BASF's strategic review of its global styrenics business. The head of BASF's Petrochemicals business in Asia Pacific stated that the move aims to focus on integrated production advantages in Europe and shut down low-efficiency capacity outside the region.
Earlier, in November 2025, BASF had already announced the closure of its polytetrahydrofuran (PolyTHF) production line at Ulsan, consolidating that capacity into its Caojing, China, site. BASF is progressively shutting down Asian production lines with marginal returns and concentrating capacity at its Zhanjiang Verbund site in China.
02 Divesting Non-Core Assets
Coatings Business
On June 2, the European Commission formally approved the acquisition of a majority stake in BASF's coatings business by Carlyle Group. The enterprise value of the transaction is €7.7 billion (approximately RMB 63.44 billion). Upon completion, BASF will receive about €5.8 billion in pre-tax cash proceeds while retaining a 40% stake.
BASF's coatings business covers automotive OEM coatings, refinish coatings, industrial surface treatments, aerospace coatings, and more.
Industry analysts believe that after BASF sells its coatings business, the three global coatings leaders – PPG, AkzoNobel, and Sherwin-Williams – will be the biggest beneficiaries. In China, companies such as SKShu, Nippon Paint China, and Oriental Yuhong will also benefit indirectly.
Neopentyl Glycol (NPG) Business
On June 17, BASF (China) Co., Ltd. and BASF SE completed their equity exit, transferring BASF Jilin Chemical Neopentyl Glycol Co., Ltd. to PetroChina for full ownership. The joint venture, established in November 1995 between BASF and Jilin Chemical Industrial Co., Ltd. (later integrated into the PetroChina system), was 60% owned by BASF. It was one of China's largest NPG producers, with an annual capacity of 35,000 metric tons. BASF has since started up a new 80,000-metric-ton NPG plant in Zhanjiang – more than double the capacity of the old Jilin facility. Thus, the 30-year partnership came to an end.
Silicates Business
On May 20, BASF signed an agreement to sell its global silicates business to PQ Corporation, including assets at the Düsseldorf and Holthausen sites in Germany. The transaction is expected to close in the second half of 2026. Silicates are primarily used in rubber, green tires, coatings, detergents, and other applications.
03 Launching Internal Transformation
On May 20, BASF initiated a cross-divisional transformation project named CoreShift. This is one of the company's largest optimization initiatives in its history, reporting directly to the CEO. The economic target is to reduce net cash fixed costs in core businesses by up to 20% by 2029, using 2024 as the baseline.
CoreShift encompasses further portfolio streamlining, divestiture of additional non-core assets, global headcount reductions, optimization of production site footprints, and adjustments to internal management processes.
From December 2023 to December 2025, BASF reduced its workforce by approximately 4,800 employees, including an 11% reduction in top management. As of the first quarter of 2026, BASF's global workforce exceeded 106,000, about 5,000 fewer than the same period last year. The company's original target of achieving annual cost savings of €2.3 billion by the end of 2026 has already reached €1.9 billion in reductions. Dr. Markus Kamieth, Chairman of the Board of Executive Directors of BASF SE, stated that the cost-saving program will continue and even accelerate in 2026–2027.
04 Zhanjiang Site Becomes Growth Hub
BASF's Zhanjiang Verbund site is now fully operational. This is BASF's largest overseas investment project to date, with a total investment of €8.7 billion, and is the company's third-largest production base after Ludwigshafen, Germany, and Antwerp, Belgium. Core capacities include a 1-million-metric-ton-per-year ethylene cracker, 400,000 metric tons/year of butyl acrylate, and 30,000 metric tons/year of isotridecyl alcohol. The site's localization rate exceeds 75%, and delivery lead times have been reduced from 45 days to 48 hours. The site is already powered by 100% renewable energy, with carbon emissions 50% lower than conventional petrochemical bases.
Notably, on May 26, BASF announced a leadership change in Greater China: Henry Lin, currently President of Asian Large Projects, will take over as Chairman and President of BASF Greater China, effective July 1.
05 Profitability and Structural Payoff
In fiscal 2025, BASF generated approximately €68.8 billion in sales, with net income rebounding to €4.7 billion, an increase of more than 85% year-on-year. In the first quarter of 2026, the profit contribution from the new energy chemicals and specialty materials segments exceeded 60% for the first time.
BASF's moves are not merely about contracting the front line and raising cash – they also represent a reallocation of resources. Capital, capacity, and manpower are being withdrawn from high-cost, low-return businesses in Europe and redeployed into high-margin segments in China and specialty materials. Plant closures, layoffs, and divestitures are means to an end: resetting the business structure so that profit sources shift from traditional commodity chemicals toward new energy materials and specialty chemicals.
