German chemical giant BASF plans to invest more than Euro1 billion (HK$11.3 billion) in Greater China and hire thousands of employees by 2013, expecting mainland sales to grow rapidly despite the clouded outlook for the global chemical market. BASF expects its Asia-Pacific sales to double by 2020. That would represent a 6 per cent compound annual growth rate, compared with its estimate of about 4.5 per cent overall growth in demand for chemicals in the region. The Asia-Pacific accounted for 20 per cent of its global sales in the first half of the year, and the mainland 9 per cent. Martin Brudermueller, the head of Asia-Pacific operations, said the mainland, Taiwan and Hong Kong would receive more than half of BASF's total planned spending of Euro2billion for the region by 2013. 'We want to invest close to our customers in the markets, [and] most of the budget is allocated for China,' he said. 'But there is still room for small and medium-sized plants in different locations in Asia.' About Euro500 million will be used for BASF's 50 per cent-held petrochemical joint venture with China Petroleum & Chemical Corp in Nanjing. It will undergo a US$1.4 billion capacity expansion by 2011. Another project is in Chongqing, where BASF signed a preliminary agreement with Chongqing Chemical and Pharmaceutical Holding (Group) in 2007 to co-invest in a 400,000 tonne-a-year diphenylmethane diisocyanate (MDI) plant. It is planned to start up in 2013. The global economic slowdown led to a delay from the original target of 2010. MDI is a raw material for making polyurethanes, polymers used in the vehicle and construction industries, as well as in refrigerators and footwear. BASF's stake and investment in the plant have not been disclosed because the scope of the project is still being discussed. But the company's investment might amount to 'some hundreds of million of euros', Brudermueller said. He added that it was too early to talk about a sustained recovery in the global chemical market, as customers in most industries were ordering in small quantities. 'But we have the most promising signals in Asia in the second quarter already ... especially in China, where the government subsidises rural home appliance purchases and consumption of fuel-efficient cars,' he said. 'But the stimulus has to be taken back some time later, and we can't forecast what will happen then.' The company suffered a 70.9 per cent year-on-year decline in net profit to Euro2.46 billion in this year's first half. BASF's products are used in a wide array of manufacturing industries, and its sales are closely linked to the health of the broader economy. Wolfgang Hapke, president of Asia-Pacific market and business development, said BASF plans to add 5,000 employees in the region by 2020, to the existing 15,000. About half the increase will be on the mainland, where the company has about 6,500 employees.