German chemical giant BASF is planning to tap into the North American shale gas revolution by focusing its investments on the United States. The company recently announced that it is moving a significant proportion of its production and research projects across the Atlantic, the Wall Street Journal reported.
The world's largest chemical producer by sales said that the move would enable BASF to take advantage of the cheaper energy available and the wider support for biotechnology research projects in the United States.
The German manufacturer is not the only one tempted by the greater business opportunities created in the United States. Many European companies from different industries have been migrating because of the affordable energy and materials costs, commented Hans-Ulrich Engel, finance officer and chief executive of BASF's North American division.
Indeed, the gap in costs between Europe and North America is quite substantial. BASF has estimated that its annual savings from operating in the United Stated instead of Europe would come in at $688 million but there are no plans to move its huge chemical complex at the moment.
Over the last few years the investment by BASF in U.S. production has doubled, the Wall Street Journal said. In 2010 the average for the previous decade was $500 million per year, while last year the company spent $1 billion on U.S. projects. BASF predicts that its capital spending on American soil will reach $4 billion through 2017.