Basf Se · XETR:BAS

Basf — Investor Day (June 2013)

74 slides from Basf's investor day presentation, Jun 6, 2013

  1. Slide 1: BASF Investor Day Asia Pacific – Presentations of Day 2 (Nanjing)

    BASF Investor Day Asia Pacific Presentations of Day 2 (Nanjing) BASF Investor Day Asia Pacific, June 5-6, 2013 1

  2. Slide 2: Cautionary note regarding forward-looking statements

    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

  3. Slide 3: BASF in China – A continuing growth story

    Investor Day Asia Pacific Nanjing, June 6, 2013 BASF in China – A continuing growth story Dr. Albert Heuser President Greater China & Functions Asia Pacific

  4. Slide 4: Agenda: Trends, BASF performance, strategy in China

    1 | Trends in the Chinese chemical market 2 | BASF business performance in China 3 | Strategy implementation in China BASF Investor Day Asia Pacific, June 5-6, 2013 4

  5. Slide 5: Greater China will increase share of regional GDP to more than 40% in 2020

    Greater China will increase share of the regional GDP to more than 40% in 2020 Real GDP  China real GDP 2012: (in US$ trillion) 5.2 trillion US$ = 35% of Asian real GDP 2010 2020 6%  Chinese per-capita income to 7% 8% 24% double by 2020 vs. 2010 8% 7% 34% 7%  12th 5-year plan (2011-2015) CAGR foc

  6. Slide 6: Manufacturing is extended inland towards Western provinces

    Manufacturing is extended inland towards Western provinces 12 Emerging Provinces:  25% of total land area  47% of China population 2011 Heilongjiang  41% of China GDP 2011 Anhui Chongqing Beijing Liaoning  31 mn refrigerators (2011)  1.72 mn vehicles, thereof Tianjin  16 mn washers (2011) 0.9

  7. Slide 7: Greater China will represent 64% of chemical market in Asia Pacific in 2020

    Greater China will represent 64% of chemical market in Asia Pacific in 2020 Real chemical production ex. pharma  China chemical production (in US$ trillion) 2012: US$ 0.6 trillion = 60% of Asian real chemical 2010 2020 1% production 2% 8% 8% 12%  Sustainability becomes 19% 7% 9% differentiating fa

  8. Slide 8: Strategic relevant market in Greater China grows in line with chemical market

    Strategic relevant market in Greater China grows in line with chemical market Strategic relevant market (SRM) Greater China  The SRM in China grows by (in billion €) ~7% p.a. (2010 – 2020), in line with chemical production 160 155  All industries will contribute to 140 SRM growth CAGR 120 + 7% p.a

  9. Slide 9: BASF is well positioned in China in an increasingly competitive environment

    BASF is well positioned in China in an increasingly competitive environment Major chemical producers in Mainland China Sales in Mainland China in 2011/2012 Annual report 2012: Sinopec ~ €27.2 bn chemical segment sales Annual report 2012: Petrochina €13.7 bn external sales of „chemicals and refinery“

  10. Slide 10: Agenda: Trends, BASF performance, strategy in China

    1 | Trends in the Chinese chemical market 2 | BASF business performance in China 3 | Strategy implementation in China BASF Investor Day Asia Pacific, June 5-6, 2013 10

  11. Slide 11: BASF's extensive Greater China network

    BASF’s extensive Greater China network guarantees access to major local markets Legend* BASF in Greater China** Asia Pacific headquarters  21 major wholly- Greater China headquarters owned companies Innovation Campus Jilin Verbund site  10 major joint Chemical production site Beijing ventures Liao

  12. Slide 12: BASF – top provider to international and local Chinese leaders

    BASF – top provider to international and local Chinese leaders* BASF Investor Day Asia Pacific, June 5-6, 2013 * Logos only represent examples out of wide list of varying customers 12

  13. Slide 13: Our Chinese business is a powerful growth engine

    Our Chinese business is a powerful growth engine Sales* and EBITDA** in China  BASF has been a committed partner to China since 1885. 7 , 1.400 EBITDA indexed (2004 = 100)  Since 2004, BASF’s sales 6 CAGR , 1.200 more than tripled Sales in billion € +17% p.a. 5 , 1.000  China is third largest mar

  14. Slide 14: BASF is a well recognized corporate citizen in China

    BASF is a well recognized corporate citizen in China „China Green Companies Top 100“ China Entrepreneur Club (CEC) - 2012 BASF Investor Day Asia Pacific, June 5-6, 2013 14

  15. Slide 15: Agenda: Trends, BASF performance, strategy in China

    1 | Trends in the Chinese chemical market 2 | BASF business performance in China 3 | Strategy implementation in China BASF Investor Day Asia Pacific, June 5-6, 2013 15

  16. Slide 16: Grow smartly in China

    Grow smartly in China Sales in Greater China* Strategy for 2020 (in billion €)  Grow business by ~11% p.a. 15  Capture market driven growth ~12 – Accompany customers‘ CAGR growth 10 ~11% p.a. – Develop business in 6.7 emerging provinces 5.1  Strengthen local R&D 5  Increase operational efficienc

  17. Slide 17: Seize new business opportunities via industry teams

    Seize new business opportunities via industry teams Industry Teams in China Textiles Construction Automotive Packaging Paint & Coatings Mining Wind Food & Electrical & Pharma Energy Agriculture Electronics Industry teams foster cooperation across BASF’s operating divisions to provide customers with

  18. Slide 18: Seize new business opportunities via industry teams

    Seize new business opportunities via industry teams Industry Teams in China Textiles Construction Automotive Packaging Paint & Coatings Mining Wind Food & Electrical & Pharma Energy Agriculture Electronics Industry teams foster cooperation across BASF’s operating divisions to provide customers with

  19. Slide 19: China is the largest automotive market, outperforming global growth

    China is the largest automotive market, outperforming global market growth Production of passenger cars and LCVs* China (in million units) 7.6% p.a. 33 EMEA North America 17 Japan 3.0% p.a. 30 3.7% p.a. 2.5% p.a. 18 23 10 13 8 other Asia** 8.0% p.a. 24 12 South America 6.4% p.a. 7 4 Production 2011;

  20. Slide 20: Automotive production in China will be concentrated in clusters

    Automotive production in China will be concentrated in 6 clusters Expected automotive OEM landscape in China 2015 Northwest Region North Region Northeast Region Number of plants: 7 Number of plants: 14 Number of plants: 12 Production 2012: ~0.6 mn units Production 2012: ~3.5 mn units Production 2012

  21. Slide 21: BASF is a global leader, partnering with auto producers in China

    BASF is a global leader, partnering with auto producers in China North Region BASF sites supporting the automotive industry Changchun  Coatings system supply Tianjin Shanghai  Automotive application  Polyurethanes center  Engineering plastics Nanjing  Coolants  Polyurethanes  Coatings system

  22. Slide 22: Chinese automotive customers contribute strongly to 2020 growth targets

    Chinese automotive customers contribute strongly to 2020 growth targets Global growth targets  BASF well positioned in China (in billion €) – fastest growing automotive market 18 17.0  Focus on international OEMs 16 and important local producers 14 + 6.7%  Increased R&D partnerships 12 12.0 with

  23. Slide 23: Outstanding record in growing business in emerging provinces

    BASF has outstanding record in growing business in emerging provinces in China BASF sales* growth in emerging provinces** in China  Sales in emerging provinces (2009 = 100) almost doubled since 2009 220  Emerging provinces account for ~15% of BASF Greater 200 China sales (2012) 180  Share of busi

  24. Slide 24: Chongqing area – strongly growing industrial and consumer market

    Chongqing area – strongly growing industrial and consumer market  Approx. 30 million people live in Chongqing  GDP 2012: ~ USD 185 billion  GDP 2008: ~ USD 83 billion  GDP growth ’08-’12: 22.2% p.a. (9.2% for China)  Key industries − Electronics and computers Chongqing − Automotive − Engineerin

  25. Slide 25: MDI investment project in Chongqing

    MDI investment project in Chongqing  MDI market in China to grow by ~10% p.a. within next decade up to 3.3 million metric tons per year (2020)  New world-scale plant with capacity of 400,000 metric tons MDI per year  Investment: €860 million  Plant 100% owned by BASF  Part of integrated complex

  26. Slide 26: Xinjiang province holds the largest natural gas resources in China

    Xinjiang province holds the largest natural gas resources in China  Xinjiang Uyghur autonomous Tarim Janggar region Basin Basin  Area: 1,660,000 km2  GDP 2012: ~ USD 120 billion Xinjiang  GDP growth 2012: 12.0%  Tarim basin is largest Chinese natural gas field  Recoverable resources close to 6

  27. Slide 27: Securing competitive natural gas for BDO / PolyTHF production

    Securing competitive natural gas for BDO / PolyTHF production  BASF and Xinjiang Markor Chemical Industry Co., Ltd. plan two joint ventures (JV): JV1: 100,000 mt* Butanediol JV2: 50,000 mt* PolyTHF  Location: Korla, Xinjiang Uygur autonomous region  Cooperation with partner to develop chemical pr

  28. Slide 28: Implement €4-5 billion investment plan

    Implement €4 - 5 billion investment plan to move closer to the customers Current investment projects  Since 1992 BASF and partners invested ~€5 billion in China Heilongjiang  Until 2020 BASF and partners will invest €4 - 5 billion in China Jilin  Major current projects: Liaoning Korla Inner Mongo

  29. Slide 29: Grow smartly in China

    Grow smartly in China Sales in China* Strategy for 2020 (in billion €)  Grow business by ~11% p.a. 15  Capture market driven growth ~12  Strengthen local R&D 10  Increase operational efficiencies 5.1  Increase local production 5 footprint by implementing ambitious investment plan  Continue to

  30. Slide 30: China: Key to BASF's success in Asia Pacific

    China: Key to BASF’s success in Asia Pacific  BASF is strong local player in China: – local production for the Chinese market – close to customer – strong local marketing and sales organization  Powerful assets in place: world-class production facilities, strong R&D presence  Unparalleled partner

  31. Slide 31: Creating competitive advantages with a Verbund in China

    Creating competitive advantages with a Verbund in China Stephan Kothrade President BASF-YPC Company Ltd. June 06, 2013 BASF-YPC Company Limited 扬子石化－巴斯夫有限责任公司 BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 1

  32. Slide 32: Agenda: Verbund site, performance, success factors, growth

    1 | Building a world-scale Verbund site 2 | Business performance 3 | Success factors 4 | Further growth plans BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 2

  33. Slide 33: Nanjing in Jiangsu province

    Nanjing in Jiangsu province One of the industry clusters in China Jiangsu Province  5th largest population in China (79 million people/2012) Jiangsu  Highly developed infrastructure Province  Manufacturing accounts for >50% of GDP Shanghai  Among top 3 in nominal GDP: 5.4 trillion RMB/2012, 17%

  34. Slide 34: Nanjing in Jiangsu province – 2nd largest chemical cluster

    Nanjing in Jiangsu province The 2nd largest chemical cluster in China Chemical Cluster Nanjing  Closeness to customers in one Natural Gas of the major industry clusters Station Nanjing Chemical Industry Park  Nanjing represents ~5% of the Chemical Sector in China Naphtha Pipeline  Second largest

  35. Slide 35: BASF-YPC, heart of our Verbund network in China

    BASF-YPC, heart of our Verbund network in China  50/50 JV with partner Sinopec, ~US$4.5 bn. (~€3.5 bn.) joint total investment until 2012  Capacity: ~ 3 million metric tons of total production/year  Steam cracker, 16 plant clusters, ~2000 employees  Commercial start-up in 2005, first expansion i

  36. Slide 36: BASF-YPC covers all relevant BASF value chains – Wave 1

    BASF-YPC covers all relevant BASF value chains Wave 1: Laying the petrochemical foundation Ethylene Ethylene Oxide Ethylene Glycol C2 Propionic Acid Propylene Oxo-alcohols Acrylic Acid Acrylates C3 Methylamines Dimethylformamide C1 Formic Acid Wave 1 (completed 2005) BASF-YPC Company Limited 扬子石化－巴斯

  37. Slide 37: BASF-YPC covers all relevant BASF value chains – Wave 2

    BASF-YPC covers all relevant BASF value chains Wave 2: Downstream expansion Ethylene Ethylene Oxide Ethylene Glycol Non-Ionic Surfactants C2 Propionic Acid Ethanolamines Ethyleneamines Dimethylethanolamine DMA 3 Propylene Oxo-alcohols Acrylic Acid Acrylates C3 Butadiene Methylamines Isobutene Polyis

  38. Slide 38: BASF-YPC covers all relevant BASF value chains – Wave 3

    BASF-YPC covers all relevant BASF value chains Wave 3: Bringing Verbund to full potential Ethylene Ethylene Oxide Ethylene Glycol Non-Ionic Surfactants C2 Propionic Acid Ethanolamines Ethyleneamines Dimethylethanolamine DMA 3 Propylene Oxo-alcohols Acrylic Acid Acrylates Superabsorbents C3 Glacial A

  39. Slide 39: BASF-YPC: ~€3.5 billion total joint capex until 2012

    BASF-YPC: ~€3.5 billion total joint capex until 2012 Capital Expenditures (in million €) 700 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 IPS 1 IPS 2 NASA Others BASF-YPC Company Limited 扬子石化－巴斯夫有限责任公司 BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 9

  40. Slide 40: Agenda: Verbund site, performance, success factors, growth

    1 | Building a world-scale Verbund site 2 | Business performance 3 | Success factors 4 | Further growth plans BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 10

  41. Slide 41: Business Performance of BASF-YPC

    Business Performance of BASF-YPC Sales EBITDA (in billion €) (indexed) 292% 300% 3 238% 2.83 2.76 250% 2.5 200% 2 167% 200% 1.93 1.5 1.72 150% 100% 1.36 1 100% 0.5 50% 0 0% 2008 2009 2010 2011 2012 BASF-YPC Company Limited 扬子石化－巴斯夫有限责任公司 BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 11

  42. Slide 42: Optimization of operational excellence

    Optimization of operational excellence  Continuous improvement of operational excellence  Local project team screens all production plants, also infrastructure & services Production  BASF delegates infuse tools Plants and methodology from other Verbund sites – technical processes – automation – w

  43. Slide 43: Agenda: Verbund site, performance, success factors, growth

    1 | Building a world-scale Verbund site 2 | Business performance 3 | Success factors 4 | Further growth plans BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 13

  44. Slide 44: BASF-YPC is a grown partnership

    BASF-YPC is a grown partnership  Synergies with local  BASF technologies Sinopec subsidiaries  Verbund knowledge  Sinopec supplies from other BASF sites naphtha and  Expertise in optimizing technical gases to operational excellence BASF-YPC BASF-YPC Company Limited  BASF-YPC provides  Sinopec

  45. Slide 45: BASF-YPC backbone for BASF's downstream activities

    BASF-YPC Backbone for BASF’s downstream activities BASF-YPC provides raw materials, utilities and services BASF-YPC C3 Propylene Acrylic Acid Methylacrylate C1 Dimethylamine C2 Ethylene Ethylene Oxide Dimethylethanolamine DMA 3 Utilities Services BASF Specialties Nanjing DMA 3 Cationic Monomer Catio

  46. Slide 46: Customer proximity of BASF-YPC

    Customer proximity of BASF-YPC Multiple synergies * *  Geographic proximity: 80% of customers within 400 km around Nanjing *  Enhanced market access through BASF China and Sinopec sales network  BASF-YPC’s supplies to local champions and to BASF’s global key accounts * Global BASF key account BAS

  47. Slide 47: BASF-YPC is perceived as a top employer

    BASF-YPC is perceived as a top employer Recruitment and retention  Perceived as top employer in Nanjing; attrition rate only ~2%  Cooperation with local universities and colleges  Successful recruitment from nationally renowned universities  Access to qualified personnel and local talent pool 

  48. Slide 48: BASF-YPC is a role model for EHS in China

    BASF-YPC is a role model for EHS in China Lost Time Injuries – Contractors, Employees High focus on EHS (per million working hours)  BASF-YPC is a benchmark for occupational & process safety 2 1.9  Outstanding reputation in environmental protection 1.5  Participation in BASF’s occupational health

  49. Slide 49: BASF-YPC: Frontrunner in stakeholder engagement

    BASF-YPC: Frontrunner in stakeholder engagement Looking beyond the fence  BASF-YPC sets new standards for distribution safety; pushing for double-hull tankers for river transportation  BASF-YPC coaches customers in product stewardship concepts  Active stakeholder dialogue: – Annual EHS Report – T

  50. Slide 50: Agenda: Verbund site, performance, success factors, growth

    1 | Building a world-scale Verbund site 2 | Business performance 3 | Success factors 4 | Further growth plans BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 20

  51. Slide 51: Further expansion at BASF-YPC

    Further expansion at BASF-YPC 3rd wave of projects under way  MOU signed with Sinopec in December 2010; up to ~US$1 billion joint investment  Individual feasibility studies  Projects already in execution: – New 60 kt SAP plant – New acrylic acid and butyl acrylate plants  Projects under consider

  52. Slide 52: Example: Highly Attractive Acrylics Value Chain

    Example: Highly Attractive Acrylics Value Chain China will become the global #1 acrylics market by 2020 Share of global Acrylics demand China will climb to #1 in acrylics  China is projected to remain 2000 2020 the world’s fastest growing acrylics market: >8% CAGR  BASF-YPC’s acrylics expansion wi

  53. Slide 53: SAP is the biggest growth story in acrylics

    Example: Highly Attractive Acrylics Value Chain SAP is the biggest growth story in acrylics SAP application split (2012) Growth in SAP  Global SAP market ~1,700 kt Feminine Care Others 3% 2%  Global growth rate: ~5% p.a.: – Increasing wealth in EM’s* – Next-generation baby diapers – Ageing populat

  54. Slide 54: BASF-YPC: Verbund Strength In China

    BASF-YPC: Verbund Strength In China  Nanjing site is a benchmark: World-scale, integrated, low-cost, consistently profitable  Customer portfolio includes regional players, national champions, global BASF key accounts – and wholly-owned BASF Specialties Nanjing  Growth driven by stepwise capacity

  55. Slide 55: BASF-YPC Company Limited

    BASF-YPC Company Limited 扬子石化－巴斯夫有限责任公司 BASF Investor Day Asia Pacific, June 5-6, 2013 Ι 25

  56. Slide 56: BASF Investor Day Asia Pacific, June 5-6, 2013

    BASF Investor Day Asia Pacific, June 5-6, 2013 31

  57. Slide 57: BASF Specialty Chemicals

    BASF Specialty Chemicals Mingwei QIN, General Manager BASF Specialty Chemicals (Nanjing) Co., Ltd. Investor Day Asia Pacific Nanjing, June 6, 2013

  58. Slide 58: Agenda: Specialty site, business and customers

    1 | Building a best-in-class specialty site 2 | Business and customers BASF Investor Day Asia Pacific, June 5-6 2013 2

  59. Slide 59: BASF Specialty Chemicals Company Nanjing

    BASF Specialty Chemicals Company Nanjing  Wholly-owned by BASF  Composed of Henghai and Sunrise areas, part of Nanjing Chemical Industry Park BASF-YPC  Close to BASF-YPC (reserved land)  Total area: ~ 37 ha  Available for expansion: 18 ha  6 plants with total investment: Henghai Henghai area a

  60. Slide 60: Key products in Sunrise area: Pigments and paint additives

    Key products in Sunrise area: Pigments and paint additives Multi-function Workshop Pigments Pigments Additives Warehouse building plant plant plant Administration building BASF Investor Day Asia Pacific, June 5-6 2013 4

  61. Slide 61: Key products in Henghai area: Flocculants and t-Ba

    Key products in Henghai area: Flocculants and tertiary-Butylamine (t-Ba) DMA3quat and flocculants plant tertiary-Butylamine plant Start-up: June / October 2012 Start-up: May 2013 BASF Investor Day Asia Pacific, June 5-6 2013 5

  62. Slide 62: Fast and cost efficient project execution

    Fast and cost efficient project execution  18 months from piling to start  Project costs under budget  Excellent EHS (environment, health and safety) record How has this been achieved?  Local engineering  Local procurement of capital goods  Closely working project team ► BASF Specialty Chemica

  63. Slide 63: BASF Specialty Chemicals benefits from BASF-YPC Verbund

    BASF Specialty Chemicals benefits from BASF-YPC Verbund BASF-YPC provides raw materials, utilities and services to Henghai area Production Nitrogen Steam Water Fuel Demin. Instrument Air/ Potable Service Ammonia Isobutene DMA3 Gas Water Plant Air Water 35kV Monitor Plant tBA Plant DMA3Q BASF Investo

  64. Slide 64: Implementing BASF global standards

    Implementing BASF global standards Full compliance with all BASF EHS and quality standards  Full compliance with local regulations  Implementation of responsible care system  No compromise on environmental protection, health and safety  Successfully gained ISO 9001 certificate  Implementation o

  65. Slide 65: Agenda: Specialty site, business and customers

    1 | Building a best-in-class specialty site 2 | Business and customers BASF Investor Day Asia Pacific, June 5-6 2013 9

  66. Slide 66: BASF Specialty Chemicals serves growing downstream specialty markets

    BASF Specialty Chemicals serves growing downstream specialty markets Cationic tertiary- Pigments / Flocculants (Zetag® ) Butylamine (t-Ba) Additives Waste water treatment / Industrial and Vulcanization accelerators for paper plants Automotive coatings, rubber and tire production Decorative paints Fl

  67. Slide 67: Demand for water treatment solutions grows rapidly in China

    Demand for water treatment solutions grows rapidly in China Socio-economic megatrends in China Growing industrial production Sustainable Water Stress Health Protection Energy Growth Flocculants BASF Investor Day Asia Pacific, June 5-6 2013 tertiary-Butylamine Pigments & Coating Additives 11 11

  68. Slide 68: Zetag flocculants for waste water treatment solutions

    Zetag® flocculants for waste water treatment solutions  Zetag® cationic polyacrylamide flocculants used to efficiently separate solids (sludge)/liquids in water treatment processes  Dry sludge can be used as fuel to generate energy  Chinese flocculants market > €150 million, growing by 8% p.a. 

  69. Slide 69: Increased need for mobility drives tire production in China

    Increased need for mobility drives tire production in China Tire production in China  Tire production in China driven (in million units) by light vehicle production, replacement tire market and 600 tire exports CAGR 500 ~7% p.a. ~500  Tire production to grow by ~7% p.a., reaching ~500 million unit

  70. Slide 70: Local production enables growth in Chinese tertiary-Butylamine business

    Local production enables BASF to grow Chinese tertiary-Butylamine business tertiary- Mercapto-  Market size of t-Ba: Butylamine benzotriazole ~ US$ 50 million (2011)  New plant serves ~15 growing customers in China Vulcanization  Switch from import to local accelerator TBBS production shortens le

  71. Slide 71: BASF participates in growing Chinese coatings market

    BASF participates in growing Chinese coatings market Paint and coatings consumption in China  Chinese coatings and paint (in million mt) market will continue to grow above GDP 18 16  Fastest growing market 16 CAGR segments: 14 12% p.a. – Architectural coatings 12 – Industrial coatings 10 9 – Autom

  72. Slide 72: BASF participates in growing Chinese coatings market

    BASF participates in growing Chinese coatings market Additives Pigments  Pigments and additives add value (color, properties) to paint and coating systems  Production at BASF Specialty Chemicals reduces lead-time and improves supply security to Asian customers Varnish Binders  Local plant with pr

  73. Slide 73: BASF Specialty Chemicals Nanjing – Powerful local presence: Room to grow

    BASF Specialty Chemicals Nanjing  Independent, wholly-owned specialty chemicals producer  World-class site  Site development is a model for other projects in Asia Pacific  Focused on high-growth downstream markets: water treatment, transportation, coatings, …  Proximity to BASF-YPC: Synergies a

  74. Slide 74: BASF – The Chemical Company

    O= BASF The Chemical Company

BASF — Investor Day (June 2013) on 6ix