wayne t. smith chris witte - basf – united states · 2018-11-17 · wayne t. smith. ceo basf...

Wayne T. SmithCEO BASF Corp.Member of the Board ofExecutive Directors

Chris WitteSVP and FreeportSite ManagerBASF Corporation

Deutsche BankInvestor Visit

FreeportMarch 8, 2016

Deutsche Bank Investor Visit – March 8, 2016 2

Cautionary note regarding forward-looking statements

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.


Freeport – Verbund in actionChris Witte

Q&A

BASF in North America Wayne T. Smith

Content



BASF North AmericaContribution to BASF Group Sales 2015

* BASF Group, incl. Oil & Gas and Agricultural Solutions

Sales (in billion €)

** Thereof Canada €0.94 bn, Mexico €0.80 bn (2015)

(22%)

North America

0

2

4

6

8

10

12

14

16

2005 2007 2009 2011 2013 2015

2015~€70.4 bn*

Europe55%

South America

6%Asia17%

CAGR

5.1%

BASF North America generates a steady ~20% of BASF Group sales


BASF North AmericaEarnings development

EBIT bSI North America(in billion €)

Sustainable increasing earnings contribution of BASF North America to BASF Group

0%

5%

10%

15%

20%

25%

0

0.5

1.0

1.5

2.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

% of total BASF EBIT bSI

CAGR

5.1%


.

Global Verbund sites of BASF Freeport is one of BASF’s two Verbund sites in North America

Freeport Kuantan

Nanjing Antwerp

Ludwigshafen

Geismar


BASF footprint in North AmericaA strong network of R&D and production sites

GeismarVerbund site

Capex* North America: €7.4 bn (2006-2010), €5.3 bn (2011-2015)

Employees in North America17,500

Production Sites100

9,900… thereof in Manufacturing:

Selected production sites

Important R&D sites

Florham Park HQ

* Historical numbers include additions to intangible assets and acquisitions

FreeportVerbund site


Recent investment focus: USGCFurther strengthening our network along the whole value chain

Beaumont, TX

Herbicide capacity expansion

Freeport, TX

Dispersion plant

Theodore, AL

Chelates plant

Geismar, LA

Formic Acid plant

Freeport, TX

Ammonia plant (Yara JV)

Port Arthur, TX

Steam cracker Feed flexibility &

expansion

Runway Deicing

WeedcontrolHome Care PaintsFibersBase

chemicals

New capacities for important products & applications


BASF approach towards specificshale gas opportunities in NAm:

Shale gas as long-term opportunityDifferentiated approach to shale gas related opportunities

Lower energy costsInput cost improvement(cracker, amines, formic)

Make-or-buy: Ammoniabackward integration*

Shale gas production

Average annual prices. Source: Wintershall, BP Statistical Review, IHS Inc. The use of this content was authorized in advance by IHS. Any further use or redistribution of this content is strictly prohibited without written permission by IHS. All rights reserved. Natural gas price Germany: Statistisches Bundesamt “Grenzübergangspreis” Germany

Crude oil(in US$/bbl)

Natural gas(in US$/MMBTU)

0

5

10

15

20

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

Crude OilWTI

Natural GasUSA

Natural Gas Germany

*JV with Yara


Shale gas as long-term opportunity: MMTP Potential Methane-to-Methanol-to-Propylene investment

Unique route to propylene, alternative to PDH process

Driver: Backward integration

Timelines:

− In evaluation since Q2 2014

− Basic engineering by Air Liquide since Q1 2015

− Selected site: Freeport

− Stop/go decision expectedby summer 2016

− Key decision criteria: Future oil/gas price expectation

MMTP cornerstones

Acrylic acid Oxo-alcohols Polyols …

Propylene Propylene(Port Arthur cracker)

Downstreamproducts

Methanol

Methane(from shale gas)

Flexible feed(NGL’s, Naphtha)


Automotive is a growth business for BASF

* Excl. precious metals, coatings refinish business;

BASF sales to Automotive vs. global vehicle production(indexed)

50%

75%

100%

125%

150%

175%

2007 2008 2009 2010 2011 2012 2013 2014 2015

BASF salesto Automotive

CAGR

6.7%

Global vehicleproduction

CAGR shown for 2007 – 2015

CAGR

2.8%


BASF business with N. American OEM’s

Innovation-drivenbusiness momentum Early adopter (e.g. new

catalyst technologies)

Outstanding level ofcustomer intimacy achieved:

Partnership for growthand sustainability Coatings as door opener for

other business opportunities

Chemistry ever-important in EVs, focus on light-weightand battery materials

Longstanding keysupplier Strong position in coatings,

performance materials, mobile emission catalysts

Several „Global Supplier ofthe Year“ awards and otherrecognitions


50

75

100

125

150

175

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Agricultural Solutions in North AmericaSuccessful product launches driving BASF’s growth

Sales North America (indexed)

100

200

300

400

500

2010 2011 2012 2013 2014

BASF #1 in US corn fungicidesUS corn fungicide market (in million €)*

0

100

200

2006 2008 2010 2012 2014

BASF’s Kixor®: Superior weed controlGlobal sales since 2010 (indexed)**

* Source: BASF panel data ** Source: Philips McDougall Global A.I. Sales


Beyond Conventional Crop ProtectionFunctional Crop Care (FCC)

Functional Crop Care (FCC): Leveraging BASF Verbund and

combining the best of chemistry and biology

3 key areas:− Seed Solutions− Soil Management− Crop Care

FCC sales target: €500 million in 2020

Significant contribution to Crop Protection pipeline with overall peak sales potential of €3 bn

0

0.25

0.5

2015 2020

2015: Urease inhibitor Limus® and biological fungicide SerifelTM

2016: Nitrification inhibitor Vizura®

2017: Biological insecticide VeliferTM

Salestarget 2020:

> €500m

(cold, heat, nutrient deficiency, ...)

Crop Protection

(diseases,weeds, pests)

Full yield potential

Average yield

140%

100%

FCC

FCC can add another layer of yield increase200%

FCC sales projection (3rd parties, in billion €)

Deutsche Bank Investor Visit

Freeport – March 8, 2016

Chris WitteSVP and Freeport Site Manager BASF Corporation


BASF Verbund Site in Freeport (Texas)

One of BASFʼs two Verbund sites in North America► Unique competitive advantages due to Verbund site structure

plus virtual Verbund with industrial partners

Lean, reliable logistics, energy and supplier resources

Operational Excellence is engrained in everything we do ►Continuous improvement of cost structure (DrivE, site-specific projects)

BASF Freeport is well positioned for future growth


BASF Freeport: World Class Occupational Safety Performance

0

2.0

4.0

6.0

8.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Responsible Care companies BASF

Freeport

Agriculture

Retail trade

Food stores

Recordable occupational injury rates in various sectors (1999-2015)

Merchandise stores


Gulf Coast Verbund

Geismar

Port Arthur

Freeport

Freeport

Geismar

Jackson

McIntosh

West Memphis

Sparks

600 miles

400 miles

200 miles

50 miles

HOUSTONPort Arthur

BeaumontAustin


Site area 2 km2

Production facilities more than 20 production plants

Sales volumes 1.7 million metric tons

Volume handled 3.3 million metric tons

Employees BASF ~800 (per Dec. 31, 2015)

BASF Freeport at a Glance


Verbund Generates >€1 bn p.a. Global Cost Savings*, Supports Sustainability

* Savings include only tangible synergies.

Sustainability: 75% of the entire energy demand from processes, cogeneration.► Reduction of 89,000 tons of CO2.

Logistics: Extensive pipeline network via Mont Belvieu and Stratton Ridge. Rail via Union-Pacific. Marine access via the Port of Freeport.

Integrated with local industry (Dow, Praxair, Air Liquide). Virtual Verbundwith Port Arthur Cracker.

BASF Freeport


Steam productionSteam consumption

Energy Profile Production Processes Freeport

Energy-producing processes

Energy-consumingprocesses

Excess steam

BASF Freeport – Energy VerbundState-Of-The-Art Energy Efficiency

Verbund of energy-producing and energy-consuming processes reduces net energy demand


Sustainability through EHS PerformanceHouston 8-hour ozone design value trends by site(in ppb)

3-year period ending at end of year shown

Metric Change*

Energy efficiency since 2002 +19%

Production volumesince 2001 +54%

VOC emissionssince 2001 -43%

NOx since 2001 -64%

* For Freeport site, 2014 compared to base year shown

60

70

80

90

100

110

120

130

140

150

1974 1979 1984 1989 1994 1999 2004 2009 2014

East C01Aldine C08

Clute/Lake Jackson

Deer Park C18/35NW Harris C26Bayland Park C53

Clinton C403Crawford C407/411Wayside C405Lang C408Croquet C409Monroe C406


BASF Freeport – Logistics VerbundReliable and Lean Logistics

Marine33%

Train18%

3.3 millionmetric tons*

Pipeline25%

Road24%

Continuously improving logistics: Costs, reliability, lead time, sustainability

* Volume handled in/out 2015


Knowledge Verbund Drives Operational Excellence

90

100

110

120

2010 2011 2012 2013 2014 2015

Operational Excellence: Continuous process and cost optimizationAverage savings > $30 M/a

Capacity(indexed 2010 = 100)


Verbund Site Freeport – Key Value Chains: Creating Synergies Along the Value Chain

Propylene

Benzene

Acrylic acid

Acrylates

Glacial Acrylic Acid

PolycaprolactamCyclohexanone

Ammonia(Joint Venture)

Synthesis GasOxo-Alcohols

Superabsorbents

Cracker Products

Freeport Products

Hydroxylamine

Cyclohexane(By Others) Caprolactam

Oleum

H2 N2Sulfuric

Acid

NG


Petro-chemicalsPetro-chemicalsAcrylic

Monomers / Oxo Alcohols

Polyamides & Precursors Polyalcohols

Coatings Textiles Adhesives Polishes Sealants PVC siding SAP raw materials

Nylon-6 for: − Carpet/apparel− Food wrap− Automotive Precursors used in − Solvents− Coatings− Fertilizer By-product

Intermediates for: − Polyesters− Coatings− Adhesives− Plasticizers

Super Absorbent Polymer

Baby diapers Adult hygiene

Acrylic Dispersions

Paints Paper products

BASF Freeport Products and Applications

Petrochemicals Monomers Intermediates Care Chemicals Dispersions

Freeport contributes to Chemicals and Performance Products


Excellence in Training and Development

Direct link into Community College talent pipeline

Shepherding diversified High School candidates through vocational programs: Strong co-op and intern program

Highly skilled, qualified workforce



Freeport – Relentlessly Moving Forward

We win asone team withour customers

Build the best teamvia recruitment,

development and retention of a skilled,

diverse workforce.

Be a recognized EHS leader through the relentless pursuit of people and

process safety.

Drive profitable growth via Verbund advantages and Operational Excellence.

Strengthen our assetsthrough consistent alignment of resources and growth strategies.

BASF Freeport is well positioned for future growth

wayne t. smith chris witte - basf – united states · 2018-11-17 · wayne t. smith. ceo basf...

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