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BASF Announces New Enterprise Strategy
- Dec 02, 2018 -

1.While achieving profitable growth while keeping the total amount of carbon dioxide emissions unchanged

2.To enhance customer attractiveness, BASF aims to achieve growth above the global level of chemical production. 

3.BASF takes full advantage of integration, innovation, and sustainable development. 

4.Digital and superior operating advantages by 2025, sales of products that contribute significantly to sustainability will reach 22 billion euros, 

5.Excluding interest, tax on special items, and annual increases in earnings before depreciation and amortization of 3 to 5 percentage 

6.Points per share per share

November 20, BASF new strategy launch site


Dr. Borneau (Martin Brudermueller), executive chairman of BASF Europe, held a new corporate strategy conference in Ludwig Port to review the companyundefineds growth in recent years.


"since 2012, BASF has increased profits before depreciation and amortization by an average of 8 per cent per year, excluding interest and taxes on special items, significantly higher than the annual fixed cost growth of 3 per cent. BASFundefineds profits are thus growing faster than the 3.7% annual growth in global chemical production. In addition, the level of free cash flow has also developed significantly in recent years, and has recently achieved a return on paid-in capital of up to 15.4%. The first objective of the new strategy is to achieve sales and sales growth. "


BASF is focused on achieving organic growth in the business sector. To achieve this quickly, BASF will focus more on customers and provide customized services and solutions. BASF will significantly simplify the architecture and processes, optimize the product portfolio, and further enhance the integrated (Verbund) system to become faster and more flexible. Mr Pok said:


"We are going to have to make an organizational shift to be more customer-centric and more agile."


The Asian market has become a key market for BASF and is also important for achieving the companyundefineds growth strategy. China has become the worldundefineds largest chemical market, accounting for 40 percent of the global market total, and will continue to drive global chemical production growth.


"by 2030, Chinaundefineds share of the global market will grow to nearly 50 percent, and BASF will grow with it," he said. Our new integrated base in Zhanjiang, Guangdong, and the expansion of the Nanjing base will significantly increase our growth in this dynamic market. "

BASF2


                                                   Financial and non-financial objectives


BASFundefineds new strategy sets ambitious financial and non-financial goals. Dr Hans-Ulrich Engel, executive vice chairman and chief financial officer of BASF Europe, said: "We are growing faster than the market and are aiming to achieve sales and sales growth above global chemical production levels." 


BASF also wants to improve profitability further, with the goal of raising profits before depreciation and amortization by three to five percentage points a year, excluding interest, tax, and depreciation on special items. "in addition," Engel said. BASF aims to achieve an annual return on used capital well above the cost of capital ratio. This means that we are actually creating added value. " 


BASF also wants to maintain its leading position in the eyes of investors to create value above the average in the chemical industry. "so we want to maintain sufficient free cash flow, with dividends per share increasing year by year," Engel said. To achieve these ambitious goals, BASF is launching a new project of excellence to be implemented from 2019 to 2021, with annual revenue of 2 billion euros starting at the end of 2021. The project will include measures in the areas of production, logistics, R & D, digitization, automation and organizational development. BASF also set ambitious non-financial targets. "even if we set a decent annual production growth target, we are committed to maintaining global greenhouse gas emissions at 2018 levels until 2030," Mr Pok said. This means that we are achieving organic growth while controlling growth in carbon dioxide emissions. " 


This goal covers major planned investments, such as an integrated production base in Guangdong, China. To achieve this, BASF will improve its production base management processes, improve efficiency, integrate resources, and, where possible, increase the share of renewable energy in power supply. "this is a challenging goal, given the high technological standards we already have in our production base, and we have to find another way to achieve it," he added. He argues that this requires a proper regulatory environment for Germany, Europe and the world. BASF has cut its greenhouse gas emissions by 50% from 1990 levels and doubled capacity. In addition to the goal of keeping total CO2 emissions unchanged by 2030, BASF hopes to reach sales of about 22 billion euros by 2025. 


These products contribute significantly to the sustainable development of the value chain. "without our staff, all the goals canundefinedt be achieved," said Bo. This is why for the first time we set a target for employee satisfaction. "We want more than 80 percent of our employees to think they can grow at BASF and keep working at their best."


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