polyamide and intermediates structural changes and challenges … · 2012-12-13 · polyamide and...

Polyamide and Intermediates Structural Changes and Challenges Ahead

Marcelo Lu

Vice President

Polyamide and Intermediates Asia Pacific, BASF

107

10th China International Polyamide & Intermediates Forum

Polyamide and IntermediatesStructural Changes and Challenges Ahead

Marcelo LuVice President, Polyamide and Intermediates10th China International Polyamide and Intermediates For umDecember, 7 th 2012

BASF’s downstream offerings

BASF’s strategic moves in other PA chains

BASF’s view on the Caprolactam Saga

BASF’s view on Polyamide and Intermediates Industri es

BASF Group at a glance

2

108







3

BASF – The Chemical CompanyWe create chemistry for a sustainable future

� Our chemicals are used in almost all industries

� We combine economic success, social responsibility and environmental protection.

� Sales 2011: €73,497 million

� EBIT 2011: €8,586 million

� Employees (as of December 31, 2011): 111,141

� In 2011, BASF filed for around 1,050 new patents worldwide

� 6 Verbund sites and around 370 production sites

Platzhalter für Bild

Polyamide and Intermediates

109


BASF Group 2011 sales* and EBIT in the regions

SalesBASF Group

73,497

North America

South America, Africa, Middle East

Asia Pacific

56%

18%6%

20%

million €(Change to previous year in %)

Europe

+14%Sales 13,316

Sales 41,036

Sales 4,418+15%

Sales 14,727+11%

+17%

EBIT 1,314+19%

EBIT 471+166%

EBIT 5,668 +9%

EBIT 1,133 -11%

*by location of company


Outlook for BASF Group

Economic environment 2012 (previous forecast)

� GDP growth: +2.2% (+2.3%)

� Growth in chemical production*: +2.9% (+3.5%)

� Exchange rate: $1.30 per euro ($1.30 per euro)

� Oil price (Brent): $110/barrel ($110/barrel)

Outlook for full year 2012

� BASF still aims to exceed the 2011 record levels in sales and EBIT before special items.

� BASF wants to earn a high premium on its cost of capital again in 2012.

*excluding pharmaceuticals


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The demand for caprolactam is determined by polyamid e 6 demand going into fibers, engineering plastics and extrusion

59%

Caprolactamdemand

Polymers for fibers

Textile

Industrial

Carpet

2979 kt68%

4401 kt

23%

18%

Extrusion polymers

Film

Monofilament

Others

679 kt15%

73%

22%

5%

Polymers for engineering plastics

Automotive

Universal

E&E

743 kt17%

43%

37%

20%

2011 caprolactam : PA 6 ( usage ratio 1.04 : 1)


Source: BASF Internal

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Automotive Industry

EU27 USA Japan China World

2011

2012

+3,9%

-6,3%

+11,4%

+12,1%

-13,4%

+18,7%

+2,2%

+8,4%

+3,4%

+6,3%

Growth of cars and light trucks production (base: units) in %

Trend projection Automotive

2015 +5,2% +6,2%+2,2% +9,5%+3,6%

Source: BASF SE, Status: August 2012


Textile Industry

EU27 USA China World

2011

2012

-3,7%

-3,5%

+4,2%

+2,7%

+8,3%

+7,4%

+6,3%

+6,1%

-1,2%

+1,7%

Annual percentage change of a country's production index

Trend projection Textiles

Asia Pacific

2015 +0,5% -1,8% +8,3% +5,2%+7,3%



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Food Industry


2011

2012

+2,3%

+0,3%

+1,5%

+2,1%

+15,7%

+10,9%

+4,0%

+3,2%

Annual percentage change of a country's production index

Asia Pacific

+7,6%

+6,4%

Trend projection Food


2015 +1,7% +1,8% +8,9% +3,9%+6,3%


Construction Industry


2011

2012

-0,4%

-2,7%

-4,1%

+5,1%

+10,8%

+8,4%

+5,8%

+6,8%

+2,5%

-3,2%

Annual percentage change of a country's total construction

Trend projection Construction

Asia Pacific

2015 +1,8% +7,0%+5,5% +5,3% +4,2%



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Adipodinitrile

Polyamide and Intermediates- managing a complex value chain

Targetmarkets

Fibers

Valuechain

SO3 H2 NH3

Hydroxylamine

Benzene

Cyclohexane

Anolone

H2 Butadiene NH3

Portfolio

Ultramid B (PA 6)Ultramid B (PA 6) Ultramid A (PA 6.6 )Ultramid A (PA 6.6 )

CaprolactamCaprolactam Adipic AcidAdipic Acid HMDHMD

AH-SaltAH-Salt

NH3

HNO3

Engineering PlasticsExtrusion

LU-888

Ultramid C (CoPA)Ultramid C (CoPA)


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Caprolactam Price Development – delta to benzene will become critical if trend continues


USD/mt

Source: Tecnon

World Caprolactam Capacity / Demand –consolidation starts at 80% utilization

Expansion case seen as disruptive to the industry a nd should trigger major consolidation and under utilization of capacities

kta


Source: BASF internal

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Projects:

by 2015 by 2020

Certain Projects 2065kta 300kta

Possible Projects 1100kta 1900kta

Speculative Projects 300kta 2410kta

Total additional Capacity: 3465kta 4610kta

New Announced Caprolactam Capacities – key two words „Not Sustainable“

Source: BASF internal

Chi

na p

lant

Chi

na p

lant

Chi

na p

lant

Source: BASF Interna / Nexant Report 2012 (BZ 1100usd/t)


CPL Industry Cost Benchmark– cost pressure already at alarming levels

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Import Gap to Continue – China import gap to remain despite new capacities

China import gap likely to continue mainly for high quality

Regional producers outside China will defend their positions

238

453 471551

457 435 415

346493

556

2009

1,228

630

2008

919

2007

925

629

625

2015

761

425

2014

858

2013

928

1,400

1,200

1,000

800

600

400

200

0

1,300

1,100

900

700

599

491445

306

472 448

500

100

300

2012

1,013

502

2011

1,127

2010

1,181

433

2006

751

2005

729

CPL Import(kt)PA6 Import(kt)

146 176155131149

344438

1,300

900

1,100

193

2013

546

2012

584

2011

716

347

104

502531

144

569 597

120

539 561

155

391

155

1,400

1,200

1,000

100

2010

693700

538

2009

606

500

2008

670

300

800

600

400

200

02015

540

2014

521

2007

717

2006

718

2005

675

CPL Import(kt)PA6 Import(kt)

Source: BASF Internal Database 2012

China import gap AP ex-China import gap

Source: BASF Internal Database 2012


Quality Differentiation – shift to quality driven quotations?

Contract – Spot relationship changing Quality differentiation recognized

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Quality Differentiation – not to be overdone but statistically proven

� Increasing high speed spinning polymer demand

� Increasing demand of high/stable quality CPL

� Total import of high quality CPL share should remain stable

� Quality differentiation increase competitiveness and prolongs use of imported material

kt+11%

+9%

High share of stable/high quality CPL still needed by some customers, most of the new polymerization expansions targeted at high speed sp inning and FDY application


BASF’s View on China’s Caprolactam Market

� Major structural CPL overcapacity foreseeable with current expand status

� Only forward integrated or “Verbund” oriented capacities sustainable

� Investment speed should slow down as CPL’s prices return to more sustainable levels

� Quality of new capacities will take some time in order to adapt to stable quality production

� Still room available for high quality/stable CPL for the next 2-4 years

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Solid Downstream – demand for PA6 polymers is expected to grow by 2.4% annually until 2021

+ 1185 kt; + 2.4% p.a.

+ 733 kt; + 1.8% p.a.

Kt*

*caprolactam equivalentsSource: BASF internal

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BASF’s Value Proposition - total industrial solution

21 €m

199 €m

201 €m

380 €m

Ultramid (PA6)

PTHF ®

MEG

CPL

Master batches

Sodium MetabisulfiteSodium Hydrosulfite

33 €m

92 €m

Formulation Ingredients

Source: BASF Internal

Fiber Raw Material

Fiber ProductionWeaving/Knitting

Dying/ Finishing

Make up Retailer

Tot

al A

P S

ales

~ €

1.1

Bill

ion

123 €m

Formulations Size Pretreatment Dyeing Aux.Printing Aux. Pigments Finishing Coating

0.12 €m

Printing: Hexamoll ® DINCH

63 €m

Antioxidants/LS HALS/UVA/Colorant

14 €m

Pretreatment, Dyeing, Finishing

11 €m

MDI, TDI

BASF Solutions Along the Textile Value Chain: 2011


Lean Portfolio – ensures we concentrate on quality and reliability


Pigmentation

Ultramid® B 24 N Ultramid® B 24 NSD Ultramid® B 24 NFD

Vis

ositi

y

Ultramid® B 27Ultramid® B 27 N

RV

= 2

.4R

V =

2.7

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Innovation is key- move away from vulnerable substitution segments and into specialized areas







121


Investing in Growth Areas- acquisition in Brazil adds new products and capacity to BASF’s portfolio


� BASF acquired the polymer business of the Mazzaferro Group, Brazil in May 2012

� The transaction includes the site with production capabilities of PA 6, PA6/66, PA6.10, PA6.12 as well as engineering plastics compounds

� The portfolio expansion allows BASF to tap further into compounding and monofilament markets

� The current products are sold under the brand name Mazmid

� Further enhancements of the portfolio are planned in 2013 and beyond

AH-Salt capabilities improved – crystalized AH-Salt now available for the Asian market


� BASF has modified and modernized its existing bag filling station and its palletizerat the AH Salt site in Ludwigshafen

� The filling station will restart operations in late 2012.

� With this investment, BASF is capable of offering salt in two physical condition, i.e. AH Salt solution and AH Salt dry packaged in 25kg bags

� Capacity stands at above 20kt/a

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Seal SandsTolling

OfficeProduction

Sao Paulo (S.A.)

Hong Kong, ChinaAntwerp

Freeport

Florham Park

Ludwigshafen

PA6 & Intermediates

PA6 & Intermediates

PA6 & IntermediatesPA6.6 & Intermediates

PA6 & PA6.10 & PA6.12

Anchieta


BASF Production Sites and Offices Landscape –growing presence to continue

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Thank You!

CPL Antwerp Site, BASF

polyamide and intermediates structural changes and challenges … · 2012-12-13 · polyamide and...

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