BASF sells shares in two joint ventures in China

BASF will sell its shares in the two joint ventures in Korla, China, the chemical company announced on Friday. The process to sell the shares in Markor Chemical Manufacturing (Xinjiang) and Markor Meiou Chemical (Xinjiang) in Korla, China, had already been initiated in the fourth quarter of 2023, but is now to be accelerated, subject to negotiations and the necessary approvals from the relevant authorities.

The company refers to recently published accusations against a partner company in China of having supported human rights violations. "The situation in the Xinjiang region has always been part of BASF's overall assessment of its joint ventures in Korla. Regular due diligence measures, including internal and external audits, have not revealed any evidence of human rights violations in the two joint ventures. Nevertheless, recently published reports on the joint venture partner contain serious allegations pointing to activities that are not in line with BASF's values," the company's statement reads. The company also emphasizes that BASF has no evidence, even in connection with the published reports, that employees of the two joint ventures in Korla have been involved in human rights violations. The latest reports relate to BASF's joint venture partner, in which BASF holds no shares.

ZDF and Der Spiegel had previously reported that employees of a BASF partner company in the Xinjiang region were allegedly involved in a state campaign of control and repression against the Muslim Uyghur minority. They are said to have spied on Uyghurs.

BASF also cites economic reasons for the sale: As part of the global corporate strategy for 1,4-butanediol (BDO), the market environment and the_{CO2 footprint} of BDO and downstream products at various production sites worldwide had been examined. The BDO value chains are under increased competitive pressure and are characterized by global overcapacity. The coal-based BDO and polytetrahydrofuran produced in Korla has a significantly higher_{carbon footprint} because coal is used as a raw material and the production process is energy-intensive.

BASF's presence in China remains otherwise unchanged, and the company is fully committed to its business activities and planned investments in China. The Greater China region already accounts for around half of global chemical production. Global growth in chemical production until 2030 will be driven by Greater China, which will account for around 80 percent of total growth in the period from 2022 to 2030.