BASF said Feb. 9 it has begun divesting its shares in two Chinese joint ventures after published reports of human-rights abuses.
The divestiture includes BASF Markor Chemical Manufacturing (Xinjiang) Co. and Markor Meiou Chemical (Xinjiang) Co. in Korla, China.
BASF stated that the decision was primarily driven by a global strategy aimed at enhancing the efficiency and minimizing the environment footprint of its value chain for 1,4-butanediol (BDO). However, concerns regarding human-rights abuses at the plants expedited the company's actions.
The company said it has not found any evidence of human-rights violations at the two joint ventures.
“Nonetheless, recently published reports related to the joint venture partner contain serious allegations that indicate activities inconsistent with BASF’s values,” the company said in a news release. “Consequently, BASF will accelerate the ongoing process to divest its shares in the two joint ventures in Korla, subject to negotiations and required approvals of the relevant authorities.”
BDO value chains are under increased competitive pressures driven by global overcapacities. Carbide-based BDO and polytetrahydrofuran produced in Korla also have a significantly higher carbon footprint due to the use of coal as a base raw material and the high energy intensity of the production process, the company said.
In the future, BASF will customize its global portfolio of BDO and affiliated downstream products to provide competitive low-PCF offerings.
