Auto sector will lead our growth in India: BASF

BASF, the Germany-headquartered chemicals conglomerate, invested Rs 1,000 crore early this month to set up a chemical plant at Dahej in Gujarat.

The new facility will be an integrated hub for polyurethane employing more than 250 people. The company has nine other manufacturing units in the country. Dr Martin Brudemueller, Vice-Chairman of the Board of Executive Directors, BASF, spoke to Business Line on the company's India plans and prospects.

What made you select Dahej for investment?

Apart from Gujarat, we were looking at Tamil Nadu, Karnataka, Andhra Pradesh and Maharashtra to set up our chemical plant. Since we already have a plant each in Karnataka and Maharashtra, we wanted a new location with proximity to raw materials. Dahej was finalised because leading chemical and petrochemical players are located there. Though the Gujarat government did not offer any tax incentive, we thought it was an ideal location.

Which sectors will the new plant cater to?

The new plant will produce a range of products that find application in industries such as appliances, footwear, automotive, construction, adhesives, architectural coatings, paper and personal care. The Dahej site complements our existing manufacturing set-up in India and will support and contribute to the growth of the Indian chemical industry. We have a polyurethane system house in Navi Mumbai and given the growth of our business, I am sure it is not going to be our last in India. (A system house develops, services and manufactures polyurethane systems for a range of industries). We have 38 systems houses globally.

Which sector will lead demand for BASF products in India?

We expect demand to grow across sectors but I expect the automobile sector to lead our growth in India. Sales of cars have been growing in leaps and bounds and we see this continuing with the country's GDP registering a growth of 6.5 to 7 per cent for the next five years. We have specialised products to make cars light-weight and thus fuel-efficient. Pharmaceutical is another sector we are bullish on as India is expected to become the 10th largest market in the sector by 2015.

In general, the chemicals industry has not been viewed in favourable light and is largely seen as not being environment-friendly. What are your thoughts on this?

It is a misconception. We are conducting programmes to create awareness among people. One should understand that we are not part of the problem, but in fact, provide solutions. Our innovative products are used for various applications to save energy. In fact, the chemicals industry is the starting point of any innovation. It is imperative to have innovative solutions to sustain high living standards; especially in developing countries which are growing at a faster pace.

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