BASF recently outlined plans to further strengthen its position as the world’s leading chemical company. The Chairman of BASF’s Board of Executive Directors Dr Kurt Bock, Vice Chairman Dr Martin Brudermüller and CFO Dr Hans-Ulrich Engel presented the details of this strategy ‘We create chemistry,’ at a press conference held in Ludwigshafen.
Bock pointed out that BASF had achieved its leading position thanks to its successful strategy in the past years. “We will build on this and make a significant contribution to meeting the needs of a growing world population,” he added.
BASF sees population growth as a crucial trend which not only poses enormous global challenge, but also creates additional opportunities, particularly for the chemical industry. “We have summarised what we do as a company in our corporate purpose: We create chemistry for a sustainable future,” said Bock.
BASF forecasts that global chemical production will grow faster than global gross domestic product (GDP) through 2020. In this period, the company expects the global economy to grow by an average of three per cent per year, and thus slightly faster than in the past 10 years, while chemical production is forecast to grow on average by four per cent per year.
BASF continues to aim to grow two percentage points above chemical production and thus increase sales by an average of six per cent per year until 2020. Overall, BASF targets sales of approximately €115 billion and seeks to further increase profitability to achieve an EBITDA of €23 billion in 2020.
“The scope of skills and know-how that we combine under one roof sets us apart from our competitors. These factors include innovative strength, broad technology basis, operational excellence and global access to relevant customer industries,” said Bock. “We add value as one company by combining these strengths.”
BASF will further develop its sophisticated and profitable Verbund system, which extends from production and technology to customers. In addition, BASF will sharpen its focus on customer industries. “Innovations of this kind require a broad portfolio, interdisciplinary cooperation and deep understanding of our customers’ value chains. We therefore will continue to develop our portfolio in the direction of customer-focused businesses,” said Brudermüller. By 2020, the company hopes to generate sales of €30 billion and an EBITDA of €7 billion with products that have been on the market for less than 10 years.
With sustainability becoming one of the main drivers of growth and value creation, BASF is aiming to strongly integrate it into business decisions. “More sustainability can only be achieved through innovation – and that is where chemistry plays an essential role,” said Brudermüller.
BASF’s sales to customers in emerging markets have almost tripled in the past 10 years and accounted for approximately one-third of total sales (excluding Oil & Gas) in 2010. In 2020, the company expects current emerging markets to contribute 45% to sales. Investments will boost the company’s future growth. Between 2011 and 2020, BASF plans capital expenditures of €30 billion to €35 billion. More than one-third of this amount will be invested in emerging markets. “We already have leading positions and fast growing businesses in emerging markets, and this is something we will build on,” said Bock.
In April 2011, the German chemical giant had completed the acquisition of compatriot inge watertechnologies, among the top ultrafiltration companies in the world, as part of a strategy to improve its position in the water treatment industry by offering customers package systems including chemicals and membrane equipment.
