BASF, Saudi Aramco, SABIC, Covestro and others have announced investments to expand production in China

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Multiple factors working in concert, coupled with the ongoing geopolitical tensions in the Middle East, have encouraged several international chemical giants to invest in expanding their operations in China. The foreign chemical companies that have explicitly announced plans to expand their production capacity in China since 2026 include the following: Covestro. Covestro’s capacity expansion was completed in early 2026; the annual TDI production capacity at its integrated facility in Shanghai increased from 310,000 tons to 370,000 tons (an increase of nearly 20%), and this facility is now in operation as Covestro’s largest TDI production site worldwide. Although the core facilities of BASF’s Zhanjiang integrated plant will come online by the end of 2025, the company will continue to work on optimizing and expanding its production capacity in 2026 as well. For example, in March 2025, an expansion of the polyester and polyurethane resin production lines at the Caojing facility in Shanghai was announced, with plans to further optimize the manufacturing processes and increase production capacity in 2026. The comprehensive production facility located in Zhanjiang, Guangdong, will be put into operation in the first quarter of 2026. Costing 8.7 billion euros, or about 71.2 billion yuan, this facility represents the largest investment in BASF’s history; once completed, it will become the world’s third-largest chemical \"superplant\". Furthermore, BASF Agricultural Technologies (Shanghai) Co., Ltd. has recently established its operations in the Waigaoqiao Free Trade Zone, a move that represents an important strategic step by BASF to strengthen its presence in Asia’s agricultural market. Acoma: Recently, Acoma has launched a major investment project to expand the production capacity of its polyvinylidene fluoride (PVDF) manufacturing facility in Changshu, China, by 20%. The new production units are expected to come online in 2028. The project will be achieved through equipment upgrades and process optimization, without the need to establish new production facilities. In early March, SABIC announced several planned projects, including reaching a final investment decision to build a new thermoplastic engineering plastic alloy factory in China. Meanwhile, the construction of its Zhongsha Gulei ethylene project in China (the SABIC Fujian Petrochemical Complex) is progressing according to the planned schedule and is nearing completion. On March 10, Saudi Aramco held a conference call to discuss its performance for the fourth quarter of 2025 and for the whole year. Amin Nasser, President and CEO of Saudi Aramco, said that given China’s large market size and relatively low costs for building factories, the company is considering the possibility of making further investments in refining and petrochemical operations there. In addition, Al-Nasser listed Saudi Aramco’s shares in refining and petrochemical complexes in Fujian, Jiangsu, Liaoning, Shandong, and Zhejiang provinces, as well as the company’s 30% stake in a new refining and petrochemical plant under construction in Panjin, Liaoning (Huajin Aramco Petrochemical Co., Ltd.). This project is expected to come online in 2026 and will include a refinery with a processing capacity of 300,000 barrels per day, as well as a chemical plant capable of producing 1.65 million tons of ethylene and 2 million tons of p-xylene per year. Saudi Aramco is the main crude oil supplier for these joint ventures. It is worth noting that the pharmaceutical sector, which is part of the downstream chemical industry, is also making significant investments in China. On March 22, Novartis announced that it would continue to increase its investments in China, expanding its R&D, production, and operational activities there; the amount invested is expected to exceed 3.3 billion yuan, thereby contributing to the innovation and high-quality development of China’s biopharmaceutical industry. On March 19, AstraZeneca announced the establishment of a commercial production and supply facility for cell therapies as well as an innovation center in Shanghai, which will make it the first leading global biopharmaceutical company to possess end-to-end capabilities in cell therapy in China. On March 11, Eli Lilly announced an investment of $3 billion in China.