basf polyurethanes division: driving efficiency, comfort and sustainability

Raimar JahnPresident

Polyurethanes Division

September 5, 2012

BASF’s Polyurethanes Division Driving efficiency, comfort and sustainability

BASF Investor Day Automotive September 5, 2012 2Polyurethanes

Polyurethanes – a strategic fit for BASF

Chemicals18%

Plastics15%

Performance Products21%

Other9%

Agricultural Solutions6%

Functional Solutions15%

Oil & Gas16%

€73.5billion

BASF Group sales 2011

Polyurethanes8%


1 | BASF – leading in Polyurethanes

2 | BASF – Polyurethanes for the automotive industry


Polyurethane demand (in million tons)

0

5

10

15

20

25

2011 2020Asia Pacific Americas

Polyurethanes is an attractive global market …

14.2

22.2

Source : Markets & Markets study 2011

Markets 2000 - 2011 2011 - 2020PU 4.9% 5.1%

GDP 2.4% 3.0%

Europe

Polyurethane market will continue to grow faster than GDP

Major growth drivers are−

Higher disposable incomes−

Increased energy efficiency requirements

−

More demanding health and comfort expectations

Key facts

CAGR

5.1% p.a.


Automotive21%

… and BASF has an overall leading positionBASF sales by region 2011

Europe 38%

Construction 24%

South America, Africa, Middle East 7 %

Electrical, electronics 11%

Asia Pacific

35%Furniture

22%

BASF sales by first customer industry 2011

North America20%

Other14%

Footware 8%

MDI TDI PU Systems PU Specialties#1 #1 #1 #1

BASF position 2011

€5.9billion

€5.9billion


Polyurethanes – Sales and earnings development

EBITDA (indexed)Sales* (in €

billion)

* Sales to

3rd

parties


BASF accesses the market via different sales channels

PU basicproducts

PU systems

PU specialties


BASF success factors–

World-scale economics–

Best-in-class cost structure–

Backward integration in Verbund–

Located in each major region

PU basic product business–

Focus on large volume applications–

Reliable outlet into systems and specialties

BASF capacities 2012–

MDI : 1,280 kt–

TDI : 560 kt

BASF MDI/TDI production sites

Production sites

Production sites (under construction)

BASF is the leading global player in MDI and TDI with regional world scale plants



PU basicproducts

PU systems

PU specialties



Close proximity to customers–

Strong focus on application development

–

Intensive customer collaboration–

Constant flow of innovations–

Reliable supply of raw materials

PU system house business–

Broad customer portfolio–

Active in all relevant markets–

Growth through selected acquisitions –

Further extension of network

BASF set up 2012–

More than 40 system houses, technical service centres and production hubs

–

>1,400 kt sales capacity

BASF system houses

Based on an intense global network BASF is the global leader in PU systems

PU System houses

PU System houses (under construction)



PU basicproducts

PU systems

PU specialties


PU Specialties – Strong innovation focus and close customer cooperation


Local production and expertise in all regions

–

Broad product portfolio–

High customer intimacy–

Constant flow of innovations–

Application development experience

TPU business–

Clear focus on high-value applications, e.g. automotive

–

Active in all relevant industries

MPU business–

Known as Cellasto®

–

Parts and system solutions for the automotive industry

BASF specialties sites

Specialties sitesSpecialties sites (under construction)


1 | BASF – leading in Polyurethanes

2 | BASF – Polyurethanes for the automotive industry


Process improvement with customized solutionsHigh flexibility and adaption to requirements

Interior comfort like–

haptics–

seating–

noise reduction–

smell/emissions

Driving comfort like–

shock absorbing–

vibration-dampening

Weight reductionReduction of energy consumption andCO2 emissionsBio-based solutions for niche applications

Polyurethanes – helping meet the current and future needs of the auto industry

Comfort SustainabilityEfficiency


Polyurethanes – the ideal choice for car makers

Suspension:Jounce bumper,

Top mount,Coil Spring isolator

Engine encapsulation

Spoiler

Headrests

Roof module

Carpet, Floor mats

Seats, handrests, armrests

Steering wheel

ABS cable

Door side part

Dashboard

Headliner

Hatrack

Air-filterhousing

Windowencapsulation


Cellasto® solutions offer−

Improved driving comfort−

Optimized driving dynamics−

Reduced component weight

Jounce Bumpers−

Inside every second car

Additional growth potentials with top mounts−

Standard material currently rubber−

BASF preferred supplier of Celasto®

solution−

Introduced at all Western, Japanese, Korean OEMs

Path forward with top mounts−

Introduction at Chinese OEMs−

Further multiplication at existing top mount customers

−

Grow top mount business to more than 50 million parts p.a. by 2020

Cellasto® – a true success story Inside every second car manufactured in the world


Cellasto® – A unique BASF offering to the automotive industry


Door handle

Innovative TPU solutions to enhance car safety

Elastollan® – Innovative TPU cable sheathings

Main applications−

Jacketing of cables for ABS and ESP systems−

Jacketing of cables for brake pad control units and other assistance solutions

−

Sheathing of charger cables

Key customer benefits−

Safety through high flame retardance−

Excellent mechanical properties−

Meeting new temperature regulations for electric and hybrid vehicles

Growth drivers−

Higher comfort and safety demands lead to more electric components and assistance systems

−

US regulation for mandatory use of rear cameras −

Additional potential through electric parking break and mandatory usage of ABS and EPS.


Elastoflex® – Innovative solutions for light-weightconstruction

Elastoflex® E−

Paper honeycomb technology for interior applications

−

Honeycomb technology: intelligent combination of paper, glass-fiber and polyurethane systems

−

Technology proven and commercial with several OEMs like Daimler and Volkswagen

Key benefits−

Lightweight with excellent strength−

Low processing cost


Trunk floors−

Sky roofs

Innovative polyurethane solutions to reduce car weight


Polyurethane solutions to improve car interior comfort

Elastoflex® E – Global solutions for soft interiorsurfaces

Elastoflex® E−

Polyurethane foam for interior applications−

Technology proven and commercial with all leading OEMs

−

Identical technology platforms globally available

Key benefits−

Soft interior surfaces−

Very robust processing−

Excellent mechanical properties


Dashboard−

Door panel

Next steps−

Ongoing global launch of technology platforms

PU foam


Innovative polyurethane solutions for temperature management

Polyurethane performance foams to reduce energyrequirements of cars

Thermal insulation of car body and doors–

Reduction of energy demand for supplementary air-conditioning in summer and winter

–

Example: Smart forvision

Engine encapsulation–

Engine reaches operating temperature faster leading to fuel savings (up to 10%) and reduced CO2

-emissions–

Example: Hyundai hed-7

Next steps–

Advance development project with leading German OEM

–

Hyundai to decide on serial production

Thermal engine encapsulation


Enhanced driving comfort through polyurethane seating foams

Elastoflex® – Tailor-made foam solutions for car seats

Market–

More than 90% of all car seats are based on polyurethanes

Growth drivers–

Number of cars produced

Success factors–

Cost leadership through world-scale production facilities

–

Innovation strengths to develop light-weight solutions

–

Broad portfolio and cross-divisional approach of BASF allowing innovative seat solutions


Innovation & close customer interaction

Tailor-made systems & specialties

Global network and production in all regions

BASF Verbund with strong automotive competence

What makes BASF successful in Polyurethanes?


Passion for the automotive industry drives BASF Polyurethanes


BASF Polyurethanes speaks the language of the automotive industry


Operational targets

Further strengthen polyurethane basic product business−

Invest in world-scale production plants for MDI and TDI (e.g. Chongqing, China; Ludwigshafen, Germany)

−

Continue to further improve production process technologies to remain cost leader

Expand polyurethane specialty business and system houses−

Remain innovation leader−

Invest in new capacities for polyurethane specialties (MPU, TPU)

and system houses

−

Continue with selected acquisitions to further broaden portfolio

BASF’s Polyurethanes targets 2015


Financial targets

Grow sales to ~€7.7 billion by 2015, especially driven by growth in emerging markets

Increase earnings through larger share of PU systems and specialty elastomers

Ensure attractive premium on cost of capital

BASF’s Polyurethanes targets 2015

Remain global No. 1 for Polyurethanes

xxx 2012 28

basf polyurethanes division: driving efficiency, comfort and sustainability

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