Global
Factbook
Strategy
Corporate Strategy
Chemistry is our passion. We make use of this passion for our customers: We want to offer them the best possible solutions and help them achieve their sustainability goals. With our products and technologies, our innovative and entrepreneurial spirit and the power of our Verbund integration, we want to grow profitably while creating value for society and the environment. This is our goal, which is embedded in our corporate purpose: We create chemistry for a sustainable future.
Humankind is facing enormous challenges in order to preserve a world worth living in for future generations. The climate is changing, natural resources are becoming scarcer, pressure on ecosystems is increasing and our growing world population needs to be fed. More and more urgently than ever, solutions are needed for a sustainable future. Chemistry plays a key role here. In almost all areas of life, it can pave the way to greater sustainability and accelerate the transformation needed to achieve this. Our innovative products, solutions and technologies help to improve quality of life and protect the environment as well as the climate. We achieve this by using raw materials more efficiently, reducing waste and enabling the production of healthy and affordable food as well as climate-smart mobility.
At the same time, BASF is also undergoing profound changes. We are transforming our company and breaking new ground to increase our profitability and achieve climate neutrality. We are facing up to the challenge of making this change socially just. This involves managing long-term policy decisions like the European Green Deal, overcoming the consequences of current geopolitical conflicts and driving forward digitalization.
At the same time, these challenges also open up numerous opportunities for new business areas and innovative products. All of this requires a clear vision as well as a high degree of creativity and flexibility.
We want to grow profitably and sustainably. To this end, we have set ourselves ambitious targets and defined concrete measures to achieve them: To increase our profitability, we are strengthening our competitiveness with our cost savings program focusing on Europe and we are adapting our Verbund structures in Ludwigshafen, Germany, to ensure the site remains future-proof. We are investing in growth markets, particularly in Asia, with China as the largest and most important growth driver of global chemical production. Furthermore, we are undergoing a fundamental transformation in the way we steer our company. As part of our Differentiated Steering concept, we are implementing new financial steering indicators tailored to each business. Our operating divisions are also continuing to adapt their specific business models and processes – supported by customized process structures, IT systems and governance frameworks.
To further embed sustainability in our business activities, we are driving innovations for a sustainable future, focusing our portfolio on growth areas, and developing products with a lower carbon footprint. We are pioneers in climate-neutral production. This means we are gradually converting our energy supply from fossil fuels to renewable sources, developing new, pioneering emission-free and low-emission production processes for our products as well as strengthening the circular economy through the use of alternative raw materials and new recycling technologies.
The success of these measures depends primarily on the ideas and commitment of our employees. This is why we want to create an environment in which they can thrive and contribute to BASF’s long-term success. Moreover, the diverse potential of digitalization used in our processes and business models further contributes to the successful implementation of these measures.
Our strategic action areas
BASF’s strategic direction is based on a comprehensive analysis of our markets, competitors and the economic environment. We continuously monitor global trends and short-term developments and anticipate the resulting opportunities and risks. In doing so, we keep a close eye on the demands of our customers and the transformation of our company. The following six strategic action areas enable us to strengthen our leading position in a competitive environment.
Innovation is the bedrock and driver of our success. BASF is a leader in the chemical industry, with around 10,000 employees in research and development and R&D spending of around €2.1 billion in 2023. We want to further strengthen this position by driving forward our research activities, especially in agriculture, battery materials, polymer technologies and catalytic and biotechnological methods. Our research units are organizationally aligned with the needs of our customers. Customer-focused activities are directly integrated into the divisions. Research activities that are relevant to several operating divisions as well as Group-wide relevant topics are driven by the global division Group Research. In addition, we are pursuing and expanding our cooperations with customers, universities and research institutions.
We believe that the economy, environment and society are inextricably linked and interdependent. In all three areas we want to create value with our products, solutions and technologies. Already in 1994, we pledged our commitment to sustainability and, since then, have systematically aligned our actions with the principles of sustainability. We want to further strengthen our position as a pioneer for sustainable solutions. We see sustainability as an integral part of our strategy as well as our targets, steering processes and business models. In doing so, our aim is to be a responsible and attractive partner for our customers, develop new growth areas, and lay the foundation for the long-term success of our company. Our approach covers the entire value chain – from the responsible procurement of our raw materials, to safety and resource efficiency in production, to sustainable solutions for our customers.
The production and processing of chemicals is our core business. Our comprehensive product portfolio ranges from basic chemicals to custom system solutions. The strength of our company lies in the Verbund and its integrated value chains. The Verbund enables us to achieve reliable, efficient and CO2-optimized production and leverages synergies in the development and application of new technologies and the use of digital solutions. At the same time, the Verbund is the foundation for meeting the increasingly diverse needs of our customers and markets with a differentiated offering. Our strategy is to produce locally for local markets, close to our customers.
We plan to invest €19.5 billion worldwide between 2024 and 2027 to expand our capacities based on market demand and to further increase the availability, efficiency and flexibility of our plants.
We want to leverage the diverse growth potential of digitalization, seize the associated opportunities to the benefit of our customers and strengthen our competitiveness. To achieve this, we promote digital skills among our employees, cooperate with partners and make digital technologies and ways of working an integral part of our business. Digitalizing our plants and systematically analyzing data enables us to further automate processes. In this way, we steer the capacity, availability and efficiency of our plants in line with market conditions. The combination of products, services and digital offerings also creates new business models and advantages for our customers, such as in the automotive and personal care industries as well as agriculture.
We are steering our portfolio toward innovation-driven growth areas. Following major acquisitions in recent years (battery materials, engineering plastics, agricultural solutions), we plan to further develop our portfolio with smaller, bolt-on acquisitions in the future. Major divestitures (pigments, construction chemicals, paper and water chemicals, kaolin minerals) in previous years were followed by the carve-out of the emissions catalysts and precious metals services business into the new BASF Environmental Catalyst and Metal Solutions (ECMS) entity and the divestiture of BASF’s nickel-based catalysts production site in De Meern, Netherlands, to IQatalyst B.V. In addition, at the end of 2023, BASF, LetterOne and Harbour Energy plc (Harbour) signed an agreement to combine the businesses of Wintershall Dea and Harbour. At the same time, we are strengthening the basis for our organic growth with investments. The major growth projects for the coming years are our new Verbund site in Zhanjiang, China, and the expansion of our battery materials business.
Our employees are key to BASF’s success. That is why we believe in the importance of an attractive total offer package and an inspiring working environment that fosters and develops 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 of structures and processes. 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 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 founded on an open feedback and leadership culture based on mutual trust, respect and dedication to top performance.