BASF’s plastic segment to grow more profitably and faster than the market
* Investment in new plants, research and capacity expansions planned
* High proportion of specialty plastics increases BASF’s cyclical resilience
Ludwigshafen, Germany - BASF aims to ensure that its Plastics segment continues to grow profitably and faster than the market. At a press conference today in Frankenthal, Germany, Dr. Martin Brudermüller, member of BASF’s Board of Executive Directors responsible for plastics and Asia Pacific, explained that this goal would be achieved on the basis of a cyclically resilient portfolio, intensive research, as well as capital expenditures, in particular in Asia, The conference is BASF’s kick-off event for K 2010, the world’s largest trade fair for plastics, which begins in Düsseldorf on October 27, 2010.
“Last year was far from easy, not only for BASF but for the entire plastics industry. In 2010, we expect an improvement in our sales and a significant improvement in earnings,” said Brudermüller.
Portfolio aligned even closer to the market
In the past years, BASF had already implemented a strategy of systematically reducing overcapacities for standard plastics while expanding its specialties business, i.e. tailor-made plastics for specific applications. Brudermüller plans to optimize the portfolio still further: “We are shedding sites and activities that are no longer competitive or that are unable to meet our expectations for profitability as part of BASF in the long term.” For example, in order to meet the growing demand for specialties BASF is expanding capacity for biodegradable plastics in Ludwigshafen and is building a Cellasto® plant in Shanghai. Cellasto® is a polyurethane used to make auxiliary springs for the automotive industry.
Whereas innovative products and specialties for specific industries and customers accounted for about 40 percent of sales in 2006, the percentage has now risen to more than 50 percent – which Brudermüller sees as a definite advantage: “With this portfolio and thanks to our know-how in research and development and in applications technology, we intend to grow profitably and faster than the market in the future too.” BASF’s innovation and expertise are also crucial, Brudermüller believes: “We work together with our customers to develop new applications and this close cooperation results in long-term customer retention.”
Megatrends boost global demand for plastics
The plastics market is expected to grow in all regions. One factor boosting growth is the rise of megatrends like urbanization, growing energy requirements, globalization and climate protection. These trends are associated with issues and industries in which plastics play an increasing role – for example energy, energy efficiency, construction and housing. “Plastics are nowadays indispensable when it comes to finding solutions to the major issues of the future. And this means new business opportunities for BASF,” explained Brudermüller.
Brudermüller expects global demand for plastics to continue growing at an annual rate of about 5 percent until 2015. Up to 2015 and beyond, the fastest growth is expected in Asia, where consumption of plastics has been higher than in Europe and North America together since 2007. “As a consequence, BASF will focus on Asia when investing in new plants in the coming decades. At the same time, we will establish strong research and development facilities in Asia in order to serve our customers close to their markets,” Brudermüller said.
Lightweight cars for climate protection
Plastics have numerous environmental benefits: For example, they use less energy than alternative materials during manufacture and processing. In many applications such as insulation for buildings, plastics reduce consumption of fossil fuels. “In this way, plastics reduce CO2 emissions, while making a substantial contribution to conserving resources and protecting the climate,” said Brudermüller. “Through our research and development activities, we are constantly working on improving the properties of our plastics so as to open up new applications.”
One example is weight reduction for cars and the associated reduction in emissions. The percentage of plastics in a typical western European car has risen from 6 percent in 1970 to about 15 percent today. The proportion in China is still only about half that figure and the use of high-grade engineering plastics is much lower than in Europe. “There is obviously a great potential in China for plastics manufacturers such as BASF, although Europe still offers many opportunities,” said Brudermüller. The average car in Western Europe could consist of more than 25 percent plastic by 2020, for instance. In addition, the trend toward electromobility is making new demands on materials and will result in a further increase in the proportion of plastics used in cars.
Diversity of features opens up access to new industries
Unceasing development is bringing new commercial applications for BASF plastics. This diversity is due to especially additives that improve the performance of plastics. BASF became global industry leader in this area with the Ciba acquisition, and now offers a comprehensive portfolio of products such as flame retardants and pigments that enables BASF to respond even better to the wishes of its customers.
Information for journalists:
Dr. Martin Brudermüller’s presentation and further information about the K 2010 trade press conference are available from 11 a.m. (CEST) on June 22, 2010 at www.basf.com/plastics/Brudermueller-speech and www.basf.com/plastics/pressconference Press conference photographs are available from 4 p.m. (CEST).
Press photos about BASF plastics themes in general are available at:
www.basf.com/pressphoto-database Keyword: Plastics
BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics and performance products to agricultural products, fine chemicals as well as oil and gas. As a reliable partner BASF creates chemistry to help its customers in virtually all industries to be more successful. With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges such as climate protection, energy efficiency, nutrition and mobility. BASF posted sales of more than €50 billion in 2009 and had approximately 105,000 employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). Further information on BASF is available on the Internet at www.basf.com.
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