BASF’s Investment in Malaysia Battery Precursors — A Signal of Global Chemical Industry Shift

Date: October 2025

 Source: BASF, regional media reports, CHEMWI analysis

🔹 Event Overview

In October 2025, BASF announced the construction of a new battery precursor materials (CAM) plant in Malaysia, scheduled to begin operations in 2026.

The project is part of BASF’s global battery material network, following facilities in Finland, China, and Canada.

Objectives:

• Diversify the battery material supply chain across regions

• Meet rising EV demand for cathode materials

• Strengthen profitability in new energy materials

🔹 Strategic Background

1️⃣ Decentralization & Geopolitical Diversification

• Lithium-ion battery supply chain is highly concentrated in China, Japan, South Korea.

• Europe and North America are pushing for decarbonization and supply chain security.

• Malaysia offers: established chemical base, political/logistical stability, proximity to Indonesia nickel and regional assembly hubs.

2️⃣ BASF’s Strategic Intent

• Expand upstream integration: metal salts → precursors → CAM

• Supply chain security: reduce reliance on a single country

• Sustainability alignment: integrate low-carbon, traceable materials

• Profitability optimization: move from commodity chemicals to high-value energy materials

🔹 Industry Chain Impact

Upstream raw materials:

• Nickel, cobalt, manganese salts demand shifts to Malaysia/Indonesia

• Formation of “mine → chemical → material” ecosystem

• Chinese suppliers may establish ASEAN JV for client retention

Midstream chemical manufacturing:

• Precursor production uses nickel sulfate, cobalt hydroxide, manganese sulfate, ammonia, complexing agents, purified water, wastewater chemicals

• Stimulates Malaysian chemical producers in new energy chemical segments

• High EHS and permitting requirements

Downstream applications:

• Malaysia becomes a regional supply hub for ASEAN, exporting to Thailand, Vietnam, Indonesia, India

• European OEMs benefit from supply security

• Long-term: Southeast Asia may become a low-carbon export center

🔹 Beneficiaries & Pressured Sectors

🟢 Beneficiaries: Malaysian chemical producers, Indonesian nickel/salt suppliers, logistics providers 

🟡 Beneficiaries: European EV/battery OEMs (stability & traceability) 

🔴 Pressured: Chinese/Korean cathode material producers, traditional European specialty chemicals

🔹 Policy & Early Warning Signals

• ASEAN Battery Council expansion → regional standardization (2025–2026)

• Malaysian EHS & wastewater regulation tightening → higher approval standards (2026)

• EU CBAM expansion → potential carbon tariffs on CAM imports (2027–2028)

• Chinese reinvestment in ASEAN → new nickel/manganese projects (ongoing)

🔹 CHEMWI Insight

BASF’s Malaysian investment signals a global shift of chemical production to low-carbon, cost-efficient emerging regions.

Trends over next 5 years:

1. Southward relocation of manufacturing bases → ASEAN as a chemical/energy hub

2. Localized, de-China-ized supply chains → Western firms strengthen non-China Asian nodes

3. Rise of low-carbon certification & traceability → new trade compliance barriers

🔹 Conclusions & Recommendations

• Investors: ASEAN chemical zones (Malaysia, Indonesia, Vietnam) = next global growth frontier

• Upstream suppliers: Engage early in BASF’s precursor supply chain

• Policy observers: Track EU–ASEAN carbon certification alignment

• Competitors: Assess potential order migration & pricing pressure

📘 CHEMWI Summary:

“BASF Malaysia represents not just battery materials expansion but an accelerating rebalancing of global chemical production geography.”