BASF Report 2021 Management’s Report – Our Strategic Action Areas 30 member of the Quantum Technology and Application Consortium We are expanding our battery materials business with further Employees (QUTAC) industry consortium launched in 2021. investments and strategic partnerships and are developing inno- For more information on digitalization in production, see page 119 vative recycling concepts, in particular to supply the fast-growing Our employees are key to BASF’s success. That is why we believe global e-mobility market with sustainable solutions. We are currently that it is important to have an inspiring working environment that 1 Portfolio building a precursor plant for cathode active materials in Harjavalta, fosters and develops employees’ individual talents and enables 2 Finland, and a production plant for cathode materials in Schwarz- them and their teams to perform at their best. We are pursuing three The acquisitions and divestitures made in the past few years heide, Germany. Both plants are scheduled for startup in 2022. In action areas to make our high-performance organization even more have oriented our portfolio even more strongly toward inno vation- Schwarzheide, we are also building a prototype plant for battery so: empowerment, differentiation and simplification. At the same 2 driven growth areas. In 2021, we successfully integrated the poly- recycling, which is expected to start up in 2023. We also reached time, we encourage and promote a leadership culture that empow- amide business acquired from Solvay, further strengthening our another important milestone in the development of a global value ers our employees to respond to customer needs quickly and effi- position in engineering plastics. We closed the divestiture of our chain for battery materials with the formation of BASF Shanshan ciently with a solution orientation. We value diversity in people, pigments business to the fine chemicals company DIC as planned in Battery Materials Co., Ltd. in China at the end of August 2021. With opinions and experience as being crucial to creativity and innovation. the first half of 2021. The sale of our shareholding in Solenis to production facilities in all key regions and a global capacity of 160 We embrace bold ideas, help our employees to implement them Platinum Equity was also completed as planned in November 2021. metric kilotons of cathode materials from 2022 onward, we are able and learn from setbacks. It is founded on an open feedback and We intend to close the divestiture of our kaolin minerals business to to serve cell manufacturers and OEM customers in all relevant mar- leadership culture based on mutual trust, respect and dedication to KaMin, announced in November 2021, in the second half of 2022, kets with tailored and sustainable solutions. We also entered into a top performance. subject to the approval of the relevant merger control authorities. number of cooperative agreements in 2021, including with battery For more information on employees, see page 97 onward cell manufacturers such as CATL and SVOLT and automotive manu- We steer our six segments along our value chains. Our operating facturers such as Porsche. The aim is to jointly drive forward the divisions drive forward our industry and customer orientation with development of innovative cathode materials and recycling differentiated strategies. technologies. The Asian market will play a key role in our future growth. With a The transition to electromobility is leading to fundamental changes in share of more than 45%, China is already the world’s largest chemi- the automotive industry. As a leading chemical supplier to the auto- cal market and will be an even stronger driver of growth in global motive industry, we will further strengthen our focus on battery chemical production in the future. Our strong innovation, production materials and battery recycling. To this end, in January 2022, we and sales base in Asia, and in particular in China, enables us to started the carve-out process for our mobile emissions catalysts respond to the needs of our customers in a differentiated way. To business, automotive catalysts recycling and the associated pre- further strengthen our position in this dynamic growth market, we cious metal services unit. The new, standalone organizational plan to build a second Verbund site in China, in Zhanjiang in the structure prepares the business for the upcoming changes in the southern Chinese province of Guangdong. Construction on the first internal combustion engine market. plants continued as planned in 2021. They are scheduled for startup For more information on material investments and portfolio measures, see page 38 onward in 2022. We will also expand the Verbund site we operate together with Sinopec in Nanjing, China, by 2023. This investment includes new production plants for selected products in the Petrochemicals and Intermediates divisions. 1 The investment in Finland is co-financed by Business Finland, the Finnish government organization for innovation funding and trade, travel and investment promotion. 2 Our investment and research activities in Schwarzheide and Ludwigshafen, Germany, receive funding from the German Federal Ministry for Economic Affairs and Climate Action and the Ministry for Economic Affairs, Labor and Energy of the German state of Brandenburg under the IPCEI on Batteries (funding code 16BZF101A/B).