Ludwigshafen, Germany – BASF is divesting its shares in two Chinese joint ventures. The two JVs, BASF Markor Chemical Manufacturing (Xinjiang) and Markor Meiou Chemical (Xinjiang) are in Korla, in China’s north-west. Its presence in China remains otherwise unchanged.
The decision, BASF said, was taken in the light of an assessment of the market environment. It also looked at the product carbon footprint (PCF) of 1,4-butanediol (BDO) made in its different production sites around the world.
This, the company said, highlighted the global overcapacity for BDO. In addition, the carbide-based BDO and polytetrahydrofuran manufactured in Korla have a high PCF as coal is a base raw material, and the process is more energy intensive. It will now customise its global portfolio of BDO and its downstream products to provide competitive, low-PCF alternatives.
BASF said that the situation in Xinjiang has always been part of its overall assessment of its JVs in Korla. “Regular due diligence measures including internal and external audits have not found any evidence of human rights violations in the two joint ventures,” it said. “Nonetheless, recently published reports related to the joint venture partner contain serious allegations that indicate activities inconsistent with BASF’s values. Consequently, BASF will accelerate the ongoing process to divest its shares in the two joint ventures in Korla, subject to negotiations and required approvals of the relevant authorities.”
It added that it has no indication that employees in the JVs were involved in human rights violations. “The most recent reports relate to BASF’s joint venture partner, in which BASF does not have a stake,” it said.