FRANKFURT -(MarketWatch)- Business momentum in Asia is weaker than expected, the vice chairman of German chemicals company BASF SE , Martin Brudermueller, tells daily newspaper Frankfurter Allgemeine Zeitung in an interview published Wednesday.
The company's sales in the Asia Pacific region, including China, were down 5% in the first three months of the year, compared with an especially strong first quarter in 2011, Brudermueller says, adding that the region is becoming more vulnerable.
"The market is suffering from self-inflicted problems, like lacking reforms and laws that lead to reserve among foreign investors," he is quoted as saying by the paper.
The European debt crisis is also weighing on Asian markets, and the situation needs to stabilize urgently, he says.
Half of BASF's business in Asia is generated in China, with Southeast Asia, Japan, India and Australia making up the rest, which is also how BASF will divide its investments in the region, he says.
With regard to India, Brudermueller says the company will soon need a large local production site, as sales in the region have now surpassed EUR1 billion and in the longer run the company can't continue to import the required volumes.
"We are going to expand our business in India step-by-step," he says.
BASF targets sales of EUR29 billion in Asia by 2020, more than double last year's sales in the region, according to Brudermueller.