Why Is BASF Investing in Brazil and Not in the US?

The August issue of C&E News has an article entitled, "BASF to Invest Big in Brazil". BASF is a huge German chemical company.

This is a relatively short article. It indicates the BASF will spend $720 million to build a world scale complex producing various acrylates for super absorbent. One retail example for super absorbent is in pads to handle incontinence.

The main question is why would BASF be investing in Brazil rather than in the US? The article doesn't say, but it might be worthwhile to speculate.

Brazil has found a large deposit of petroleum off its Atlantic Coast. In fact, Pres. Obama made a political faux pas by congratulating Brazil and indicating that we would be one of its best oil customers. While Brazil can be a good retail market, it is small compared to the US. Therefore, marketing consideration likely a significant factor in BASF's decision. More likely, they have looked at tax benefits and general favorable Brazilian government attitudes toward regulation as compared to those in the United States.

If this is true, it is another example of why we have in the USA a declining economy with related high unemployment. It would seem advisable for some of the state agencies, such as Texas, to ask BASF why they chose Brazil for their expansion, rather than taking advantage of the huge chemical complex already established in the Houston area.