we create chemistry for a sustainable future€¦ · china chemical production 2020: us$1.7...

We create chemistry for a sustainable futureStephan KothradePresident, Greater China and Functions Asia PacificShanghai, March 8, 2018

March 20182 | Deutsche Bank Field Trip, Shanghai

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These statements are based oncurrent estimates and projections of the Board of Executive Directors and currently availableinformation. Forward-looking statements are not guarantees of the future developments andresults outlined therein. These are dependent on a number of factors; they involve variousrisks and uncertainties; and they are based on assumptions that may not prove to beaccurate. Such risk factors include those discussed in the Opportunities and Risks Reportfrom pages 111 to 118 of the BASF Report 2017. BASF does not assume any obligation toupdate the forward-looking statements contained in this presentation above and beyond thelegal requirements.


Agenda

At a glance: BASF in Asia Pacific and China1

Innovating to fuel growth in Asia Pacific2


BASF is growing in and with Asia Pacific1890

First business contact in India

1982Ulsan site started in

South Korea

1966First

production in China

1954First business contact in South Korea

1989Business

startedin Malaysia

2001Inauguration of Kuantan Verbund site

2005Inauguration

of Nanjing Verbund site

2012Inauguration of Shanghai Innovation Campus

2014Inauguration of Dahejsite

1885First

delegate in China

2015Inauguration of Chongqing MDI plant

1988First productionin Japan

1850s 2010s1950s 1970s 1990s

2017Inauguration of Mumbai Innovation Campus


BASF is present in 18 markets

~100 production sites*

~125 sales offices*

18,256 employees**

~€14.3 billion sales***

~€2.2 billion EBIT

BASF in Asia Pacific 2017

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

* Only selected sites and offices are depicted on this chart. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50%.

** As of December 31, 2017.

*** Sales by location of customer.

Regional centerVerbund sitesSelected sitesR&D/Technical centersShared Services Center


BASF’s performance in Asia Pacific

* By location of customer

0.0

1.0

2.0

2012 2013 2014 2015 2016 2017

2.2

EBIT (billion €)

0.9 0.8 0.70.4

1.1

0

5

10

15

2012 2013 2014 2015 2016 2017

12.5 12.4 12.3 12.3

Sales* (billion €)14.3

12.2 Developments in 2017 Considerable sales growth across all

sub-regions and business segments, driven by higher prices and volumes

Significant increase in earnings, led by the Chemicals segment

Strong underlying demand across most sectors and markets


Functional Materials & Solutions36%

Agricultural Solutions4%

BASF in Asia Pacific: Balanced portfolio

Sales* by segment in 2017(billion €)

Sales* by sub-region in 2017(billion €)

Performance Products 29%

Other3%

Chemicals28%

€14.3 billion

ASEAN15%

Greater China51%

Australia, New Zealand3%

South Asia11%

Japan12%

South Korea8%

€14.3 billion

*Sales to third parties by location of customer; figures do not include sales of joint ventures consolidated at equity such as BASF-YPC Ltd., Nanjing, China

South Asia: India, Pakistan, Bangladesh, Sri Lanka

ASEAN: Singapore, Philippines, Vietnam, Thailand, Indonesia, Malaysia, Myanmar


We participate in innovative and growing markets

Electronics

6.7%

3.1%

Agriculture

2.9%

Transportation

4.9%

Consumer Products

Source: BASF

Estimated CAGR 2015–2020 for selected industries, Asia Pacific

4.4%

Construction


China is the third largest market for BASF globallyChina nominal GDP growth 2017: 6.9%

≥ 9%

6.9% − <9%

< 6.9%

GDP growth rate 2017:

Tibet

Qinghai

Sichuan

Yunnan

Hainan

Hebei

Heilongjiang

Liaoning

Shanxi

BeijingTianjin

Shandong

Henan Jiangsu

ZhejiangShanghaiAnhui

Jiangxi

Guizhou

Chongqing

Fujian

Hubei

Hunan

GuangdongGuangxi

Inner Mongolia

Gansu

Ningxia

Shaanxi

Xinjiang

Jilin

China chemical production 2020: US$1.7 trillion; around 70% of Asian real chemical production

Initiatives such as One Belt One Road and Made in China 2025 expected to boost growth and innovation

More stringent enforcement of laws related to protection of the environment

Chemistry will enable innovationsin downstream industries

Source: National Bureau of Statistics and provincial bureaus of statistics, P.R. China


BASF’s extensive network guarantees access to major local markets

Greater China

* As of December 31, 2017 ** By location of customer *** Some sites are not shown due to scale.

Mainland China, Hong Kong, Taiwan 25 major wholly-owned subsidiaries

7 joint ventures

25 production sites

24 sales offices

8,982 employees*

~€7.3 billion sales** in 2017(excl. BASF-YPC, Nanjing)

Asia Pacific headquarters

Verbund siteProduction siteSales office

Greater China headquartersR&D and Technical Centers

Legend ***

Jiangsu

Taiwan

Liaoning

Jilin

Shandong

Guangdong

Beijing

ZhejiangChongqing

Guangxi

Tianjin

Hong Kong

ShanghaiSichuan Anhui

Fujian

Xinjiang


Sustainability in China: dialogue and partnerships with stakeholders

BASF sets standards for… occupational and process safety distribution safety environmental protection and promotion of

sustainability along the value chain

BASF actively engages via… industry associations regular stakeholder dialogues, including

NGOs community advisory panels publication of integrated annual reports

encompassing economy, society and environment, since 2009


Agenda

At a glance: BASF in Asia Pacific and China1

Innovating to fuel growth in Asia Pacific2


R&D in chemistry lays the foundation for future innovation

Synthetic dyes Fertilizers Plastics / foams Health care & nutrition, crop protection Systems

2016Maglis®

1900 1950 2000

1869Alizarin

1897Indigo

1901Indanthrene

blue

1923Methanol

1913Ammonia

1937Polyethylene

1936Buna

1951Styropor®

1963Vitamin A

1974Basagran®

herbicide

1980Citral

1990Vitamin

B2 1998 Neopor®

2011 Xemium® fungicide

1930Polystyrene

1934Magnetic

tape

1993Opus® fungicide

1996Strobilurinefungicide

2008HPPO

2006Ecovio®

2015Slentite®

1949U46 herbicide

2013 Infinergy®

DroughtGard®

FWCTM Four-Way-Conversion Catalyst


Need for quick adaption to the fast changing R&D environment

Academic research broadens

Chinese competitors leverage R&D

Start-ups drive technology

Technological progress accelerates

Battle for talent intensifiesDigitalization in R&D

Globalization of R&D

Open innovation


Asia Pacific: home to headquarters of BASF Advanced Materials & Systems Research

Effective January 2016, BASF established regional research hubs across the globe.

AmericasResearch Triangle Park

AsiaShanghai

EuropeLudwigshafen

Bioscience Research

Process Research & Chemical Engineering

Advanced Materials & Systems Research


201610,000 FTE

Asia

Euro

pe

future

Euro

pe

Asia


Effective and efficient R&D for innovation in growth marketsGlobalization of R&D

R&D Center Suwon Focus: Electronics

R&D Center Amagasaki Focus: Electronics, Battery

Materials

Innovation Campus Shanghai Focus: Advanced Materials, Process

Engineering, Environmental Catalysts

Innovation Campus Mumbai Focus: Crop Protection, Specialty

ChemicalsInnovation Campuses

Major R&D sites

R&D locations


A unique concept: Innovation Campus

Innovation Campus

Business community

Media

Investors

Science & academia

Customers

NGO

Government

R&D employees

Shanghai2012

Mumbai 2017

€145 million investment 600+ R&D employees

from 15 nationalities Headquarters of

Advanced Materials & Systems Research

€50 million investment 100+ R&D professionals Space for over 300 R&D

professionals in the future Focus areas: crop

protection, specialty chemicals



Success factors: identifying market trends, close interaction with customers and enhanced capabilities

Addressing specific market needs

* LASD: liquid applied sound damping

Waterborne coating system for minivansBASF solution: Coating system with differentiated performance

Key contributions: Lean portfolio combining mono-coat and integrated paint systems

Reduced sound for chassisBASF solution: LASD*

emulsions applied to chassis

Key contributions: Long lasting sound reduction

Better indoor air qualityBASF solution: Low VOC acrylic dispersions for paints

Key contributions: Meets stricter regulations and growing consumer demand; added functionalities such as stain resistance

“Super concentrated” laundry detergentBASF solution: New polymer Sokalan® HP 20

Key contributions: First superconcentrated liquid detergent with enhanced whiteness properties


Digitalization in R&D: enabling new digital solutions for our businesses

Digitalization in R&D

Data science Knowledge systems Scientific modeling

By integrating digital technologies into BASF’s everyday R&D operations we will boost effectiveness of research, increase efficiency and open up new innovation opportunities.

Super-computer

QURIOSITY

Effective performance of ~1.75 Petaflop

Dramatically reducing simulation and modeling time from months to days

65th place in the TOP500 list, the fastest computer in the chemical industry


Stain-resistant coating: faster market entry by digital engineering


Challenge No suitable water-based white furniture coating with improved resistance against colored stains found via classical experiments

Research Data analysis led to dedicated experiments

Solution Newly developed formulation enabled accelerated market entry

New stain-resistant coating for the furniture industry developed based on systematic data analysis

Number ofexperiments

reduced by factor

10


Innovate with our partners: network for Asian Open Research (NAO)

* Tsinghua University

* Beijing University of Chemical Technology

* Fudan University

* Changchun Institute of Applied Chemistry

* Kyoto University

* The Chinese University of Hong Kong

Zhejiang University

* Sichuan University

* Seoul National University

* Universities with long time collaboration or at least 2 collaboration projects

Open innovation


We innovate to fuel growth in Asia Pacific



Open innovation

we create chemistry for a sustainable future€¦ · china chemical production 2020: us$1.7...

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