On October 19, 2026, BASF and Highsun Group signed a non-binding memorandum of understanding, planning to integrate their respective polyamide 6 value chain businesses in Europe into a 50:50 equal-share joint venture. The scope of assessment also covers the two parties' global extrusion businesses excluding North America. Both parties' respective engineering plastics downstream businesses are explicitly excluded.
BASF will no longer bear its European PA6 upstream alone. In September, it had just cut its European caprolactam capacity from 500,000 tons to 400,000 tons, with all or part of the four plants at Ludwigshafen shut down. In October, it signed a joint venture memorandum with Highsun, putting the remaining PA6 polymerization and extrusion assets into the venture. Cutting capacity first, then finding a partner—this sequence shows that what the joint venture carries is not growth, but reintegration after contraction.
What Highsun brings is not European CPL capacity
Highsun's caprolactam assets in Europe have already stopped. Fibrant, a Dutch caprolactam producer acquired by Highsun in 2018, had approximately 135,000 tons/year of CPL capacity in Geleen. In March 2026, Fibrant shut down this plant due to extremely low demand and uncompetitive production costs. The plant is currently on standby and can be restarted if the market improves, but local CPL production in Europe has already been interrupted.
Highsun's leverage in this deal is its global-scale CPL capacity and cost structure. Through bases such as Shenyuan New Materials, Highsun has built the world's largest caprolactam production capacity, currently reaching 1.7 million tons per year, accounting for approximately 25% of global capacity. After Fibrant shut down European CPL production, Highsun's Chinese plants continue to export caprolactam and related products to Europe to meet contractual and spot demand.
The joint venture allows Highsun to bring in access to a global CPL cost benchmark, while BASF provides European PA6 polymerization plants and extrusion assets outside North America, and Highsun provides the raw material cost baseline needed to keep these plants running under Europe's cost structure. In the words of BASF CEO Markus Kamieth, the purpose of the integration is to improve asset utilization and reduce costs.
A 50:50 structure shares the cost center
Both parties' respective engineering plastics downstream businesses are not within the scope of the joint venture. Engineering plastics is the highest value-added segment of the PA6 value chain, serving end markets such as automotive and electrical/electronics that require customized material performance. BASF's retention of this business means its strategic focus along the PA6 chain continues to tilt toward downstream high-value-added applications. Highsun likewise retains its own downstream business.
What enters the joint venture is the upstream polymerization and extrusion segments—the parts of the PA6 value chain closer to commodity attributes, and also the parts most directly hit by Europe's cost structure. The 50:50 equal shareholding allows both parties to jointly bear the operating costs and load optimization responsibilities of these assets, while each retains room to earn differentiated profits from downstream applications.
What the joint venture carries is not a growth story, but a cost proposition. Its success depends not on whether European PA6 demand rebounds, but on whether Highsun's CPL cost advantage can, in a sufficiently short time, pull the utilization rates of BASF's European polymerization and extrusion assets to a sustainable level.
BASF's PA6 polymerization assets in Europe are distributed across two integrated sites, Ludwigshafen and Antwerp. Highsun has deployed 31 manufacturing centers across China and Europe. If the joint venture materializes, its plants will be in Europe, but its raw material cost floor will come from China.
This may be a new survival form for Europe's basic chemicals after losing independent cost competitiveness—equal ownership, assets remaining in Europe, and the cost baseline externalized.
