LUDWIGSHAFEN, July 7 — The shift is unmistakable. For decades, the German chemical industry was the backbone of the country’s export miracle, a model of high-wage, high-efficiency manufacturing. Now its leaders are making choices that reveal a fundamental realignment of global industrial power.
Martin Brudermüller, the CEO of BASF since 2018, embodies this dilemma more starkly than any other executive in the sector. Under his watch, the world’s largest chemical company has placed a massive bet on China while simultaneously retreating from its home market.
The trend underneath is not merely about one company or one man; it is about the slow, grinding erosion of Germany’s industrial competitiveness.
The China Bet
In 2023, BASF announced a €7.3 billion investment in a new chemical plant in Zhanjiang, China. That figure is enormous by any standard—the single largest investment in the company’s history. The Zhanjiang site is designed to be an integrated, world-scale production hub, serving the fast-growing Asian market from the ground up.
For Brudermüller, this is a growth story. China remains the world’s largest chemicals market, and proximity to customers there is a strategic necessity.
But the decision also carries a clear message about Europe. BASF is not building a plant of this scale in Germany. It is building it in southern China, where construction costs are lower, energy is more available, and regulatory hurdles are fewer.
Watch this space: the Zhanjiang project is a template for where the global chemical industry is heading.
The German Retreat
At the same time, Brudermüller has overseen a stark contraction at home. BASF cut 2,600 jobs in Germany, a direct consequence of what the CEO has publicly described as punishing energy costs and intensifying competition. The cuts are not cosmetic.
They represent a structural downsizing of BASF’s German footprint, which has historically been the company’s heartland. Brudermüller has been blunt in his criticism of German energy policy.
He has called for more government support for industry, arguing that the current framework—high taxes, expensive electricity, and a rapid phase-out of nuclear and coal—puts manufacturers at a permanent disadvantage against competitors in the United States, China, and the Middle East. For Brudermüller, the issue is existential. If Germany cannot provide affordable energy, he argues, it cannot sustain energy-intensive industries like chemicals.
The trend underneath is a slow de-industrialization of Europe’s largest economy.
The Dilemma of German Leadership
Brudermüller represents what analysts now call the German industrial dilemma. On one hand, the home market is becoming less hospitable. On the other hand, the growth opportunities are in China, a country that is also a strategic competitor.
BASF’s dual-track strategy—investing billions in China while cutting jobs in Germany—is not a contradiction. It is a rational response to the incentives created by policy.
The broader German chemical sector is watching closely. BASF is the bellwether. If the industry leader is shifting its center of gravity eastward, smaller players may follow.
The question is whether Berlin can reverse the trend with policy changes—cheaper energy, faster permitting, lower taxes—or whether the damage is already done. What’s changing is the baseline assumption.
For decades, German industry assumed that the home market would always be competitive. That assumption is now gone. Brudermüller’s decisions reflect a new reality: companies will go where the conditions are best, and loyalty to the home market has a price.
What to Watch Next
The next few years will be decisive. BASF’s Zhanjiang plant is expected to come online in stages through the late 2020s. If it succeeds, it will validate Brudermüller’s strategy and likely accelerate the shift of chemical production to Asia.
If it struggles—due to geopolitical tensions, regulatory changes in China, or demand slowdowns—the narrative could shift. But for now, the direction is clear.
Brudermüller has placed his bet. The German chemical industry is watching, and the rest of European manufacturing is taking notes. The trend underneath is not just about one CEO or one company.
It is about the end of the post-war assumption that Germany would always be the factory floor for the world. That era is closing, and Martin Brudermüller’s decisions are the evidence.
