BASF meets challenges of demanding North American, global automotive industry; anticipates growth in automotive coatings, plastics

SOUTHFIELD, MI. U.S.A., June 5, 2000 - BASF Corporation is improving its production efficiency, introducing new, environmentally friendlier products and achieving world-class quality standards required by its automotive industry customers.

Senior executives responsible for BASF Coatings and Plastics businesses briefed foreign and domestic media representatives today on BASF's growing involvement with the global automotive industry. The briefing and associated activities were held at the BASF Automotive Campus in Southfield, MI., just west of Detroit, as a prelude to the company's listing Wednesday (June 7) on the New York Stock Exchange.

In its automobile coatings business, BASF produces innovative products such as Variochrom® auto paints that change colors depending on lighting and viewing angles and Ureclear® clearcoat automotive finish.

In addition to the steady growth in its automotive coatings business, BASF expects robust growth in automotive plastics. Engineered plastic materials, urethanes and polystyrene products provide greater durability, lower vehicle weight and manufacturing efficiency, often replacing vehicle components formerly made of metals.

Considering the advantages that plastics have in the area of cost, manufacturing efficiency, durability, weight and recyclability, BASF expects that an all-plastic car ultimately will be produced by an original equipment manufacturer, opening huge new markets for BASF plastics.

BASF is a major supplier of coatings and colorants, plastics, fiber products and chemical additives used in a wide variety of automotive applications. The company is a direct supplier to most of the world's major auto producers, to first- and second-tier suppliers to the global automotive industry and to many other specialty suppliers.

"Effectively competing in the automotive industry involves much more than offering products that adhere to stringent quality standards. We must supply customers anywhere in the world with just-in-time delivery, and we must bring new initiatives and technologies to the table. And after we do all that, we must meet cost reduction requirements every year," said Frank E. McKulka, President of BASF Corporation's Coatings and Colorants division, based in Southfield. "These factors are a given and BASF is a formidable, successful competitor. What differentiates suppliers from one another are innovations and an ability to consistently add value beyond the industry's already demanding standards."

According to McKulka, BASF offers many advantages to effectively add value for its automotive customers. Examples include the Company's expertise as an active participant in the global market and its worldwide network of operations, a regular flow of new products and technologies that deliver economic and environmental advantages, and customer-focused e-commerce systems.

"Today's world of automotive coatings is more than chemistry and technology," said Raimar Jahn, Group Vice President for BASF Corporation's Automotive OEM Coatings business. "We are constantly looking for ways to create and add value by providing innovative solutions to meet and exceed our customers' needs. To accomplish that, we must be leading edge in everything we do."

BASF's Automotive OEM Coatings group recently launched several leading-edge initiatives, all of which are consistent with the Company's worldwide Triple Customer Focus concept of innovation, partnership and worldwide presence. They include:

• The ECO 2 SM product development and technical consultation initiative, which takes economy and ecology into account for creating new technologies. BASF's integrated process featuring a powder slurry clearcoat, next generation lead-free electrocoat, new waterborne systems and one-component clearcoats based on carbamate chemistry prove this approach is commercially feasible;
• The ENSPHERE™ Project e-commerce and data resource system;
• The CONTINUUM program for efficiency improvements across the supply chain; and
• RAVEN, or raw material value engineering, which concentrates on optimizing all paint formulations.

"In the automotive plastics arena, BASF prides itself on its growing global capabilities and technological prowess," said William A. Bernstein, Group Vice President for BASF Corporation's Urethanes business. "We offer the automotive maker a broad product line, global supply from world-scale plants in North America, Europe and Asia; and solution-driven technology that is available at a local level."

"Since BASF entered the automotive plastics business in 1989, the Company has experienced growth totaling more than 25 percent," added Bernstein. "Our sales within North America alone have exceeded $100 million and those growth figures increase about two percent each year."

"The substitution of plastics for existing metal parts within the automotive industry has contributed to our success because, in many cases, we provide better performance materials at lower costs," he added. "By providing these innovative, less-costly materials, we help automotive makers shift to more modular production, which enables our customers more opportunity for growth."

BASF Corporation ranks among the top producers of chemicals and related products in the United States, Canada and Mexico, with sales of $7.2 billion in 1999. BASF in North America has its regional headquarters in Mount Olive, New Jersey, and is a member of the BASF Group (Ludwigshafen, Germany). "We don't make a lot of the products you buy. We make a lot of the products you buy better. ®" summarizes BASF's diverse product mix including chemicals, polymers, automotive coatings, colorants, pharmaceuticals, nylon fibers and agricultural products. BASF in North America employs more than 15,000 people at about 50 locations and has an Internet site at http://www.basf.com. Slogan is a registered trademark of BASF Corporation.