BASF ready to establish its presence in the North American powder coatings market

New Production Plant at Morganton, N.C., Site Will Come On Stream in October

INDIANAPOLIS, September 26, 2000 - With its new powder coatings plant in Morganton, N.C., ready to come on stream next month, BASF Corporation's Industrial Coatings business group is poised to become a leading supplier of this technology in North America. The company is already well established in powder coatings in Europe and South America. BASF is exhibiting its capabilities in this technology at the 2000 Powder Coating Conference and Exhibition in Indianapolis (Booth #2107).

Like coil and wood coatings, powder coatings is a core technology for the worldwide BASF Industrial Coatings business. BASF assembled sales, marketing and technical support functions for powder coatings in 1999 when the company announced its plans to build the new plant at Morganton to establish a North American supply capability. With an annual volume of about 173,000 metric tons and a medium-term growth perspective of 7 percent a year, according to the most recent market assessments, the North American powder coatings market presents a very attractive investment opportunity for BASF. From a global perspective, BASF expects the powder coatings markets of Europe, Latin America and Asia/Pacific to also grow.

"Modern powder coatings have for a long time been an economical alternative to established coating technologies," said Dr. Wolfgang Straehle, head of the corporate division Research and Purchasing and of the operating division Industrial Coatings of BASF Coatings Aktiengesellschaft. "They offer a wide range of colors along with many different textures, give finishes of outstanding quality and can be applied at lower cost and more efficiently than other coating products."

"Moreover, these eco-efficient coating products are becoming an increasingly interesting alternative to liquid coatings," Straehle continued. "More sophisticated product and application technologies open up new fields of use almost every day. Today, glass and ceramics are coated with powder. In pilot tests powder coatings have been applied to wood and plastics, with very promising results as the dry coatings used here are cured by means of ultraviolet light. Powders for coil coating are a subject of development for us, as are performance powders that provide an especially high level of weathering resistance."

Future Growth Opportunities Based on Extensive Background

BASF's goals are to meet customer demand for an increasingly efficient coating of diverse substrates and pursue the ongoing development of the leading edge coating technology through intensive research. BASF is one of the few industrial coatings manufacturers able to provide customers with all technologies, such as electrocoats, solvent- and waterborne liquids, powder slurry and powder coatings that include ultraviolet/electron beam technology. In the next few years, BASF intends to grow its powder business significantly on a global scale. Ambitious targets have been set in segments where BASF has already obtained a strong market share -- such as appliances, pipe coating and automotive parts - and in new areas as well.

BASF is among those who pioneered manufacturing powder coatings. The company started 30 years ago to make powder coatings at its plant in Muenster, Germany, the nucleus of BASF's powder coatings activities. This operation has been modernized and expanded several times since then. The acquisition of Salchi back in 1998 provided a sustained boost to BASF's powder coatings business, especially in Europe. With its second powder coatings plant in Verbania, Italy, BASF will have sufficient capacity available to realize its strong medium-term market growth plans in Europe. The company has also operated a powder coatings plant in Sao Paolo, Brazil, for four years that supplies the South American market. The fast growing markets in the Asia/Pacific region are also vital targets for BASF's growth plans for powder coatings, which are supported with its joint venture with NOF in Japan.

In North America, the BASF Industrial Coatings business group is a part of the Coatings and Colorants division of BASF Corporation. Along with its subsidiaries, BASF Corporation ranks as the third largest producer of chemicals and related products in the United States, Canada and Mexico, with sales of $7.2 billion in 1999. Based in Mount Olive, New Jersey, BASF Corporation is the North American affiliate of BASF AG (Ludwigshafen, Germany), which is listed on the New York Stock Exchange under the trading symbol "BF."

"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 and industrial coatings, colorants, pharmaceuticals, nylon fibers and agricultural products. BASF in North America employs more than 16,000 people at more than 50 locations and has an Internet site at http://www.basf.com.

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