BASF, the world's leading chemical company, plans to invest one-fourth of its annual R&D funds into the Asia-Pacific region with a focus on the Chinese market.

"The region has potentially strong demand for chemical innovations," said Martin Brudermueller, vice chairman of the board of executive directors at BASF.

"Our strategy is to invest more in these markets to meet that fast-growing demand."

Brudermueller was speaking during the company's world tour themed "We create chemistry," which made its first Asia stop at Shanghai Pudong Expo Center, before continuing on to Mumbai, Tokyo and Seoul. The tour began in Germany at the start of this year and has also visited the US, Canada and Brazil.

"The campaign underlines our commitment to supporting the sustainable development of China, our third-largest market worldwide, by investing in leading technologies and innovations," said Brudermueller.

BASF spent 1.6 billion euros ($2.06 billion) on R&D in 2011 and is expected to spend more this year, according to sources. One-third of funds will be used to develop technologies aimed at green issues.

"Part of our strategy for the global market is to develop battery materials for electric vehicles," said Brudermueller.

BASF intends to inject large amounts of investment into creating lithium sulphur batteries. It has created a global business unit that will bring together its current and future battery-related electromobility activities.

Launched on Jan 1 this year, the new business will integrate the existing battery work of BASF's catalysts division, intermediates division and Future Business GmbH, a BASF group company that focuses on next-generation lithium batteries.

Earlier this year BASF acquired Novolyte Technologies based in Cleveland, Ohio, in the US, which is a manufacturer of electrolyte formulations for lithium-ion batteries as well as specialty chemicals for several key market segments. Within the framework of the acquisition, BASF continued a joint venture of Novolyte with Korean partner Foosung Co, a producer of high purity speciality salt lithium hexaflourophosphate, a key material for manufacturing lithium-ion battery electrolytes.

Novolyte operates production sites in Baton Rouge, Louisiana and in Suzhou, Jiangsu province. An additional site working on LiPF6 battery production, to be operated by the BASF-Foosung joint venture, is under construction in Nantong, Jiangsu province.

"We want to be a leading battery supplier for electric auto makers in the Chinese market," said Brudermeuller, adding that BASF will increase investment to promote battery production and sales.