Our corporate purpose
We create chemistry for a sustainable future
Global
Investors
Global
Investors
Our strategy
Corporate Strategy
At BASF, we are passionate about chemistry and our customers. We want to be the world’s leading chemical company for our customers, grow profitably and create value for society. Thanks to our expertise, our innovative and entrepreneurial spirit, and the power of our Verbund integration, we make a decisive contribution to changing the world for the better. This is our goal. This is what drives us and what we do best: We create chemistry for a sustainable future.
The world is facing major challenges. Climate change is advancing, the world’s population is growing and so is its need for food. More and more people live in cities and the demand for individual mobility is rising. At the same time, natural resources are limited. More than ever before, we need solutions that make sustainable growth possible. Chemistry plays a key role here. It can help to overcome global challenges in almost all areas of life. By combining our expertise with our customers’ competence, we can together develop sustainable and profitable solutions.
Our innovations, products and technologies help to use natural resources more efficiently, produce enough food for everyone, reduce emissions, enable climate-smart mobility, improve the capabilities of renewable energy, and make buildings more energy efficient, among other things. Our purpose reflects what we do and why we do it: We create chemistry for a sustainable future.
We want to continue to grow profitably and make a positive contribution to society and the environment. We see disruptive changes in the chemical industry – like the advance of digitalization, the development of circular economy models or the transformation to climate- neutral production – as an opportunity. We have set ourselves ambitious targets along the entire value chain. Our customers and their needs are at the core of our strategy. We want to maintain our leading position in an increasingly competitive environment. To achieve this, we are accelerating our innovation processes and deepening cooperation with our customers. We are systematically aligning our portfolio with growth areas and integrating sustainability into our value chains even more strongly. Our Verbund structure is the basis for efficient, safe and reliable production both now and in the future. We leverage digital technologies to continuously improve processes and customer relationships, for example. We create a working environment that best enables our employees to contribute to BASF’s success.
Global trends provide opportunities for growth in the chemical industry
Population growth:
Driven by the emerging markets
+25%
2020 to 2050
Digitalization:
Rapid growth in volume of data
456
zettabytes in 2030
China the largest market:
Share of global chemical market
~50%
by 2030
Climate change:
Required reduction of greenhouse gas emissions
to achieve the 2°C goal
–70%
by 2050 (baseline 1990)
Circular economy:
Non-recycled plastic waste worldwide
~200
million metric tons per year
Electromobility:
Growing demand for battery materials until 2030
~25%
per year
Sources: U.N., IEA, UBS Foresight, BASF
Our strategic action areas
Innovation is the bedrock of our success. BASF is an innovation leader in the chemical industry, with around 10,000 employees in research and development and R&D spending of around €2.1 billion. We continue to build on these strengths by bringing research and development closer together and making our customers’ demands a greater part of our innovation process. We involve them at an earlier stage and are expanding our partnerships with customers and external partners.
Our balanced innovation pipeline lays the foundation for future growth: We are working intensively on pioneering product, process and business model innovations, for example in chemical recycling, battery technologies, the low-carbon production of basic chemicals and the digitalization of agriculture. At the same time, we are driving forward incremental product improvements in all business units that offer our customers sustainability and/or cost advantages, such as in lightweight construction for the automotive industry and energy-efficient building materials.
A key driver here is sustainability. We want to create value for the environment, society and business with our products, solutions and technologies. We pledged our commitment to sustainability in 1994 and since then, have systematically aligned our actions with the principles of sustainability. We want to further cement our position as a thought leader in sustainability, which is why we are increasing the relevance of sustainability in our steering processes and business models. This establishes us as a key partner supporting our customers, opens up new growth areas and secures the long-term success of our company.
Our approach covers the entire value chain – from responsible procurement and safety and resource efficiency in production to sustainable solutions for our customers. We have already almost halved our carbon emissions since 1990 while simultaneously doubling sales product volumes. We want to achieve net zero emissions by 2050 with our ambitious carbon management. In addition, we have set ourselves the target of significantly increasing sales of products that make a substantial sustainability contribution in the value chain (Accelerator products) to €22 billion by 2025. A particular focus is the circular economy. For instance, we want to increase the use of recycled raw materials in production, close materials cycles with innovations and develop new, circular business models.
Our core business is the production and processing of chemicals. Our strength here lies – both now and in the future – in the Verbund and its integrated value chains. The Verbund offers us many technological, market, production-related and digital advantages.
Our comprehensive product portfolio, which ranges from basic chemicals to custom system solutions, enables us to meet the increasingly diverse needs of our customers with a differentiated offering. This is complemented by our global presence and our many decades of experience, which have allowed us to develop an in-depth understanding of the needs and landscape of local markets. At the same time, value chains in integrated Verbund structures can be steered efficiently to conserve resources and optimize CO2. Thanks to our Verbund structures, we were able to avoid 6.2 million metric tons of CO2 globally in 2020. We want to invest around €22.9 billion worldwide between now and 2025 to expand capacities based on market demand and to increase the availability, efficiency and flexibility of our plants. Our aim here is to be close to our customers and to grow with them.
Digitalization is an integral part of our business. We want to significantly improve the availability and quality of our process data. To achieve this, we will digitalize processes at more than 420 plants worldwide by 2022. We will systematically analyze this data to further automate processes and in this way, increase efficiency, for example with predictive maintenance. In addition, combining internal and external data provides many new opportunities to manage our businesses more efficiently, improve processes and create value added for our customers. We are already using artificial intelligence to collate data from various sources, for example to accelerate innovation processes, optimize our supply chains and logistics concepts, and to simulate product applications for our customers.
The combination of products, services and digital offerings also gives rise to new business models and advantages for our customers, such as in agriculture or 3D printing. We want to leverage this growth potential and seize the opportunities offered by digitalization to the benefit of our customers. To do so, we are making digital technologies and practices an even more integral part of our processes, extensively promoting digital skills among our employees, and cooperating with external partners on specific topics.
The acquisitions and divestitures made in the past few years have oriented our portfolio toward innovation-driven growth areas. The acquisition of the integrated polyamide business from Solvay and the purchase of various businesses from Bayer further strengthened our position in engineering plastics and in the agricultural sector. We completed the divestiture of our construction chemicals business to Lone Star in 2020 as planned and aim to close the sale of our pigments business to DIC in the first half of 2021.
The Asian market will play a key role in our future growth. With a share of more than 40%, China is already the world’s largest chemical market and drives the growth of global chemical production. We expect this share to increase to around 50% by 2030. Our strong innovation, production and sales base in China enables us to respond to the needs of our customers in a differentiated way. To further strengthen our position in this dynamic growth market, we plan to build an integrated Verbund site in Zhanjiang in the southern Chinese province of Guangdong. Construction of the first plants started in 2020.
We are also systematically expanding our battery materials business to serve the fast-growing e-mobility market. We steer our six segments along the value chain. This creates a high level of transparency around our business activities. Our operating divisions drive forward our industry and customer orientation with differentiated strategies.
Our employees are key to BASF’s success. That is why we believe that it is important to have a working environment that fosters employees’ individual talents and enables them and their teams to perform at their best. We are pursuing three action areas to make our high-performance organization even more so: empowerment, differentiation and simplification. We are giving our employees more individual freedom. At the same time, we encourage and promote a leadership culture that empowers our employees to respond to customer needs quickly and efficiently with a solution orientation.
We are simplifying our processes and continually refining our organizational structure. Significant parts of the functional services that were previously performed centrally by a total of around 20,000 employees have been integrated into our 11 operating divisions. This and greater entrepreneurial freedom enable our business units to take a differentiated, flexible approach to market requirements with tailored business models. The aim is to increase both customer satisfaction and the profitability of our business.
We value diversity in people, opinions and experience as being crucial to creativity and innovation. We embrace bold ideas, help our employees to implement them and learn from setbacks. This is why we foster a feedback culture based on honesty, respect and mutual trust.
Our values and global standards
How we act is critical to the successful implementation of our strategy and how our stakeholders perceive us. This is what our four core values represent: creative, open, responsible, entrepreneurial. They guide our actions and define how we want to work together – as a team, with our customers and our partners.
The BASF brand
We want BASF to be seen as a leading brand in the chemical industry. Our corporate purpose – We create chemistry for a sustainable future – and our values together form the basis of BASF’s brand value proposition.
This is connectedness, which embodies one of BASF’s core strengths: our Verbund concept. The BASF Verbund is what makes innovative solutions for a sustainable future possible. We want to communicate this worldwide and make it tangible. The claim “We create chemistry,” as stated in the BASF logo, helps us embed our solution-oriented strategy and our expertise in the public perception. Wherever our stakeholders encounter our brand, we want to convince them that BASF stands for innovation and sustainability. This builds trust with our customers, contributes to our reputation and to our company value. We regularly measure our brand and communication success. This gives us relevant and meaningful insights into how the BASF brand is perceived among target groups. This enables us to further refine the brand profile and develop strategies and measures to continually improve our brand status.
Business and competitive environment
BASF’s global presence means that it operates in the context of local, regional and global developments and a wide range of conditions. These include:
- Global economic environment
- Legal and political requirements (such as European Union regulations)
- International trade agreements
- Industry standards
- Environmental agreements (such as the E.U. Emissions Trading System)
- Social aspects (such as the U.N. Universal Declaration of Human Rights)
BASF holds one of the top three market positions in around 70% of the business areas in which it is active. Our most important global competitors include Arkema, Bayer, Clariant, Corteva, Covestro, Dow, Dupont, DSM, Evonik, Huntsman, Lanxess, SABIC, Sinopec, Solvay, Sumitomo Chemical, Syngenta, Wanhua and many hundreds of local and regional competitors. We expect competitors from Asia and the Middle East in particular to gain increasing significance in the years ahead.