BASF Plans To Invest Rs 22,000 Crore in Asia Pacific Over Next Five Years
Germany-based chemicals company BASF SE expects to invest nearly Rs 22,000 crore in Asia Pacific countries over the next five years and a fair share of this amount is likely to come into India, a top company official told BloombergQuint.
On Friday, the company opened a research campus in Navi Mumbai, its second centre in Asia, said Sanjeev Gandhi, member of the board of executive directors, BASF. He added that India remains one of BASF's top investment market.
In the last four years, we invested something like 300 million euros into India. This is something like Rs 2,000 crore and this was the biggest investment cycle in our history… We intend to invest something like three billion euros, this is roughly Rs 22,000 crore (in Asia Pacific). India will get its fair share of investments.Sanjeev Gandhi, Member-Board Of Executive Directors, BASF
For BASF, India is the third largest market after Greater China and Japan. The company ranks among the top 10 chemical companies in India.
Demonetisation Impact
The government's decision to demonetise old high-value currency notes resulted on subdued demand in BASF's cash-oriented businesses like agro chemicals and the fast-moving consumer goods (FMCG) sector, Gandhi said. However, the company saw some demand revival in the last two months and things are slowly returning to normalcy, Gandhi said. He hopes to close the current financial year on a positive note.
Product Diversification
BASF India is one of the major dominant players that sells products for the soybean crop in India and in the last few weeks, it launched a new range of products for rice.
So far, the company has majorly launched products for soybean in the country.
The company has a pipeline of 250 products, which it plans to launch in Asia by 2020, and a large portion of these products will also be introduced in India.
The German company's strength is the agro chemical business is in herbicides, fungicides and insecticide and in India and it will focus on launching products for speciality crops, fruits, grains, soybean and cotton, Gandhi said.
Despite facing competition from Chinese products entering the Indian market, the company will resort to increasing prices, he added.
Price Increase
The company plans to effect price increases on the back of rising crude oil prices, as it is a key component. BASF SE expects the price of crude oil to increase to $ 55 per barrel in 2017.
“Our forecast for BASF is $55 per barrel across a 12-month period. This means we are expecting oil prices to go up $11 and then this will then create a kind of an inflationary effect in the chemical segment,” said Gandhi.
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