BASF invests in batteries to take on Asian makers

BASF, the world’s largest chemical maker, plans to invest about $122 million by 2016 in the development and distribution of battery components. The company is keen to challenge Japan’s dominance in the market.

The German company intends to become one of the top three global providers of materials for producing batteries and cells by 2020 and to generate $609 million in sales, according to Ralf Meixner, senior vice president for battery materials at BASF.To strengthen its positions BASF has already set up a new unit for its battery activities and purchased Novolyte Technologies, which makes electrolyte formulations for lithium-ion batteries. It also bought a market leader in nickel-metal hydride rechargeable batteries, Ovonic Battery and US-based battery developer Sion Power.Currently Japan holds an almost 80% share of the global lithium-ion-battery market with its Stella Chemifa, Asahi Kasei and Tanaka Chemical considered the world largest manufacturers of battery components. Meanwhile Chinese and Korean players are catching up.But BASF expects the state of things to change soon. “In Japan, we expect a consolidation of companies as mid-sized firms will disappear,” Meixner said.Analysts agree the battery market would change in the next few years as the industry enters new territory – making batteries for hybrid cars, which is completely different from making batteries for phones and cameras.