Monday, November 19, 2012

C&EN: BASF opens an R&D facility in China

Jean-Francois Tremblay has an interesting short article about BASF opening an R&D facility in Shanghai. Some of the language sounds familiar to me:
“By 2020, 50% of BASF’s R&D will be conducted outside Europe,” said Andreas Kreimeyer, a board member who oversees BASF’s research organization, at an inauguration event. “Shanghai will work on global topics.” The firm plans to take advantage of the Shanghai center’s location to team up with leading scientists at universities and research institutes throughout Asia... 
[snip] After Kreimeyer assumed responsibility for R&D in 2003, he led an effort to reconsider BASF’s commitment to centralizing research in Germany. He and his colleagues concluded that the pros of keeping basic research in Germany did not outweigh the cons. The new strategy has been under way for the past two to three years, he told C&EN in Shanghai.“Centralization has the big advantage that you have all the company’s top experts in one location,” Kreimeyer said. But BASF seeks to work with the world’s top scientists, and that is more easily achieved through a greater geographic spread, he said. “The argument for decentralization is stronger, but you have to make sure that the required communication and cooperation take place.” (emphasis CJ's)  
Another advantage of decentralization is likely to be greater creativity. The China R&D center will mostly be staffed by scientists from Asia, which BASF expects will lend a greater diversity of thought to its research activities, noted Martin Bruderm├╝ller, the firm’s vice chairman and head of Asian operations.
It's difficult not to look askance at some of the language, even if where BASF puts its R&D is of no particular significance to me.* I wonder if Mr./Dr. Kreimeyer has announced to German BASF employees where 50% of company R&D is going to be, or if that's a statement only made outside their ear shot.

[UPDATE: I should note that BASF was actually hiring quite strongly for very specialized people in their NJ facility for quite a while, so the US is benefiting from their very strong position in the chemical sector.]

I am also terribly amused at this set of statements on tax incentives (emphases mine):
In Shanghai, companies that set up R&D facilities can benefit from incentives including cheap land, subsidies, and exemption from import tariffs. The incentives were not a major factor in BASF’s decision to establish the R&D center in Shanghai, said Stefan Dreher, a BASF vice president who managed the set-up of the facility. More important, he said, is that China’s business hub is a natural location for a research center serving Asian customers.
“Asian hair is different. Construction materials are different,” Dreher said. “It’s too slow to ship all the materials and samples to headquarters and expect that they solve all the problems.” Without a major R&D center in Asia, he added, BASF would lag in responding to requests from its customers in Asia.
The incentives are never the reason that companies act, is it? (There's also an amusing (but probably small) dissonance is saying that Germany is close enough for planned communication and cooperation, but too far/slow to respond to customer needs for R&D. Huh.)


  1. It's actually true - it was not really about incentives. It is just that the Chinese demand that the companies build research centers if they want to do business there.

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