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Specialty Chemicals

BASF carves out emissions catalyst business

German chemical giant will instead invest heavily in battery materials

by Alex Scott
December 8, 2021


Photo of emissions catalyst systems for automotives being produced by BASF in Germany.
Credit: BASF
Auto emission control catalysts such as those produced at BASF’s site in Nienburg, Germany, shown above, will become part of a new independent entity.

The combustion vehicle business is set to shrink as the transportation sector moves away from engines powered by fossil fuels to those powered by batteries. The chemical maker BASF is now revealing how it will respond.

The German company says it will carve out its business of making catalysts that cut emissions from combustion engine vehicles into an independent unit. Simultaneously, it has unveiled plans to invest up to $5 billion in the rapidly growing battery materials sector.

BASF’s emissions catalyst business will be based in Iselin, New Jersey, the former headquarters of Engelhard, an emissions control catalyst and pigment company BASF acquired in 2006 for $5.6 billion. The new entity will be named BASF Automotive Catalysts and Recycling. It will have 4,000 employees and operate from 20 production sites around the world. BASF will begin the carve-out in January and expects the process to take up to 18 months.

The move suggests BASF will ultimately sell the business, analysts at the investment firm Jefferies Group say in a note to clients. There is limited overlap between the emissions catalyst business and BASF’s interconnected Verbund approach to chemical manufacturing, the analysts point out.

BASF’s battery materials business is currently focused on Europe, but the company says it will spend some of the up to $5 billion it has earmarked for investment to add production capacity outside of Europe. “BASF will become a leader in innovative and sustainable cathode active materials with a significant production capacity footprint in Asia, Europe and North America,” Peter Schuhmacher, president of BASF’s catalysts division, says in a press release.

BASF hopes to generate annual sales of at least $7.9 billion by 2030 from its battery materials and base metal service activities.

BASF’s approach contrasts with that of Johnson Matthey, the world’s largest producer of emissions control catalysts. The UK company had its own plan to become a player in electric-vehicle batteries with a nickel-rich, energy-dense cathode material. But last month JM decided that the battery materials business is too capital-intensive and that it will exit the sector. Meanwhile, JM will retain its slowly shrinking emissions catalyst business.

Umicore, another large emissions control catalyst maker, is also pushing into batteries. The Belgian company just announced plans to establish a joint venture with Volkswagen to build up production capacity in Europe for high-nickel cathode materials, which allow long driving ranges.

At the same time, Umicore disclosed that demand for its “mid-nickel” cathode materials is starting to slow. As a result, the firm says earnings growth in its battery materials business next year and in 2023 will be lower than expected.



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