A growing need for food, energy and clean water, limited resources and a booming world population – reconciling all these factors is the greatest challenge of our time. Innovations based on chemistry play a key role here, as they contribute decisively to new solutions. Effective and efficient research and development is a prerequisite for innovation as well as an important growth engine for BASF. We develop innovative processes and products for a sustainable future and drive forward digitalization in research worldwide. This is how we ensure our long-term business success with chemistry-based solutions for almost all sectors of industry.
For BASF, innovation is the key to successfully standing out from the competition in a challenging market environment. Our innovative strength is based on a global team of highly qualified employees with various specializations.
We had around 10,000 employees in research and development in 2017. Our three global technology platforms are run from our key regions – Europe, Asia Pacific and North America: Process Research & Chemical Engineering (Ludwigshafen, Germany), Advanced Materials & Systems Research (Shanghai, China) and Bioscience Research (Research Triangle Park, North Carolina). Together with the development units in our operating divisions, they form the core of our global Know-How Verbund. BASF New Business GmbH and BASF Venture Capital GmbH supplement this network with the task of using new technologies to tap into attractive markets and new business models for BASF.
In 2017, we generated sales of over €9 billion with products launched in the past five years that stemmed from research and development activities. In the long term, we aim to continue significantly increasing sales and earnings with new and improved products.
Our global network of about 600 universities, research institutes and companies forms an important part of our Know-How Verbund. We collaborate with them in many different disciplines. For instance, we are working on innovative materials for electrochemical energy storage with the Karlsruhe Institute of Technology (KIT) at the BELLA (Battery and Electrochemistry Laboratory) joint laboratory.
In our excellence program UNIQUE – The BASF Academic Partnership Program, we are working with 15 leading universities around the world. BASF also runs four postdoctoral centers that pool collaborations with several research groups on a regional level. The North American Center for Research on Advanced Materials (NORA) and the California Research Alliance (CARA) postdoctoral centers are located in the United States. The Joint Research Network on Advanced Materials and Systems (JONAS) postdoctoral center is active in Europe, while the Network for Asian Open Research (NAO) covers the Asia Pacific region.
In 2017, our research pipeline comprised approximately 3,000 projects. Expenses for research and development amounted to around €1,888 million, just above the prior-year level (€1,863 million). The operating divisions accounted for 80% of total research and development expenses in 2017. The remaining 20% related to cross-divisional corporate research focusing on long-term topics of strategic importance to the BASF Group. We strive to maintain a high level of spending on research and development.
The needs of our customers are the starting point for chemistry-based innovations, requiring market-driven research and development. Creativity, efficiency and collaboration with external partners are among the most important success factors.
The aim of our innovation approach is to increase BASF’s power of innovation and to secure our long-term competitiveness. We aim to achieve this by concentrating our research focus on topics that are strategically relevant for our business, strengthening our existing scientific processes and optimizing our organizational structures.
We continued to refine our innovation approach in 2017 and have identified additional, far-sighted topics that go above and beyond the current focus areas of our divisions to drive innovation in new business fields and with new technologies. We are also working on overarching projects that are relevant from a technological, societal or regulatory point of view. For example, we continued to work on the systematic application of digital technologies in research and development.
Our global research and development presence is vital to our success. We want to further advance our activities, particularly in Asia as well as in North America, and are adapting this to growth in regional markets. A stronger presence outside Europe creates new opportunities for developing and expanding customer relationships and scientific collaborations as well as for gaining access to talented employees. This strengthens our Research and Development Verbund and makes BASF an even more attractive partner and employer.
In addition to the expanded Innovation Campus Shanghai which opened in 2015 (previously Innovation Campus Asia Pacific), we inaugurated the Innovation Campus Mumbai in 2017. The new Campus brings together existing and new research and development activities in Mumbai, India, under one roof, where up to 300 scientists focus on crop protection and process development.
The number and quality of our patents also attest to our power of innovation and long-term competitiveness. We filed around 800 new patents worldwide in 2017. We once again ranked among the leading companies in the Patent Asset Index, a method that compares patent portfolios across the industry.
For BASF, digitalization presents great opportunities along the entire value chain. Using digital technologies and data, we are creating additional value, ranging from higher efficiency in our plants to accelerated innovation processes and innovative business models.
Digital technologies have a rapidly expanding influence on research and development. Managing large quantities of data has become a decisive factor for future scientific and economic success. In BASF’s digital approach, virtual modeling and computer simulation go hand in hand with physical experiments in the lab. Simulations help with the design of experiments and facilitate forecasting, while experiments deliver measurable results and evaluate the computer models. This results in a better understanding of chemical products and processes, and thus enables greater innovation in a shorter period of time. A key element is our new supercomputer “Quriosity,” which was put into operation in October 2017 in Ludwigshafen. With 1.75 petaflops1, it offers around 10 times the computing power that BASF previously had for scientific computing.
Researchers around the world benefit from digitalization to effectively develop their creative ideas and to collaborate intensively with others. Knowledge systems enable quick assessments of BASF’s pre-existing know-how, simulations compare different ideas and guide the costly experiments, and data science creates new insights from BASF’s unique proprietary data. All this is integrated into the daily work of the researchers.
1 One petaflop is equal to one thousand trillion (1015) operations per second.
There is significant potential to increase efficiency in manufacturing with digital applications. One example is predictive maintenance, which provides methods for detection and prediction of anomalies of critical production assets, based on big data analytics. With predictive maintenance, we reduce unexpected shutdowns and thus increase available capacity.
A tightly integrated and truly connected supply chain improves transparency, agility and speed. Most importantly, it enhances our supply chain service to our customers. Our global maritime and air shipments are now transparent thanks to the successful implementation of a global logistics visibility platform with connections to 600 carriers.
New technologies and data are helping us change the way we approach markets and collaborate with customers. We are creating new digital offerings, as well as gaining access to new customer groups. We have now developed 50 innovative digital business models and are currently launching the first ones in the market.
|Functional Materials & Solutions||23%||3|
|Oil & Gas||2%||5|
|Corporate research, Other||20%||6|
Our specialty monomers enable innovation in our customers’ downstream applications. These include a new application with tertiary butylacrylate (tBA) in decorative paints. tBA is primarily used as a functional component in water-based exterior paints. Our customers can use tBA to formulate dispersions that improve the specific properties of their exterior paints – such as weathering and surface adhesion – without increasing production costs.
BASF’s constant stream of new ideas has secured its position as the technology leader and largest supplier of hydrosulfites for over 100 years. These bleaching and reducing agents are used in paper production, for example. The new Adlite®, a hydrosulfite for the paper industry, testifies to our innovative strength. Adlite® improves the entire paper production process and makes it more flexible. It enables our customers to achieve a higher degree of whiteness with the same raw materials and in this way, manufacture higher quality paper. At the same time, Adlite® saves energy and mitigates the impact on the environment, resulting in lower wastewater residues.
Acronal® 6292 is a new styrene acrylic binder that enables the production of more environmentally friendly scrub resistant interior wall paints. The polymer’s high pigment binding power also means that less binder is required to produce a scrub resistant paint. This offers a cost advantage for paint manufacturers. Acronal® 6292 can also be used to produce low-emission paints without biocides – preservatives needed to prevent bacterial growth in traditional water-based paints.
Pronovum is a new BASF technology in the area of omega-3 food supplements. Intake of omega-3 can help improve consumers’ coronary and cognitive health. Independent studies have shown that the body processes omega-3 fatty acids formulated with Pronovum four times better than conventional, highly concentrated omega-3 fatty acids in the form of the chemical compound ethyl ester. Pronovum is a patented mixture of omega-3 oils in a new formulation that can be accessed much better by digestive enzymes.
Functional Materials & Solutions
Thanks to the biomass balance method developed by BASF, we are able to flexibly replace fossil resources in our current Verbund system with sustainably generated bio-based raw materials by feeding biogas and bionaphtha directly into the value chain at the very beginning. The first biomass-balanced products have now been introduced in the area of automotive refinish coatings. The share of raw materials replaced by renewable raw materials in the Production Verbund is allocated to certain refinish coating products according to certified methods. Coatings in this category add ecological value by saving on fossil-based raw materials while maintaining their usual qualities.
Refineries use fluid catalytic cracking (FCC) catalysts to extract high-value products such as gasoline, diesel or liquid gas from the residues of crude oil distillation. Borocat®, our new generation of FCC catalysts, increases the yield of valuable hydrocarbons – especially from heavy crude oil with metal contaminants. The metals contained in crude oil present a particular challenge to further processing. Our new boron-based catalyst technology hampers chemical byreactions so that up to 25% less hydrogen is produced. This enables refineries to process heavier, more contaminated crude oil and use these resources more efficiently.
Our well-stocked innovation pipeline comprises products with a launch date between 2017 and 2027. The first market launches of Revysol®, our new fungicide, are scheduled for the 2019 growing season following registration with the relevant authorities. A new herbicide with a unique mode of action to control key weeds in cereal should come on the market in 2019. The market introduction of the new insecticide Inscalis® to combat piercing-sucking pests is planned for 2018. Another new insecticide, Broflanilide, which helps farmers control chewing insects like potato beetles and caterpillars in specialty and field crops, should be on the market from 2020. In Functional Crop Care, we are pushing ahead with the market introduction of Velondis®, a biological fungicide for seed treatment. This is planned for 2018.
The global automotive industry is undergoing a fundamental shift from traditional vehicles, powered solely by internal combustion engines, towards electrified power train concepts that include hybrid cars and battery electric vehicles.
BASF is the largest chemicals supplier to the automotive industry, with €11.4 billion in sales in 2017 and leading market positions in OEM coatings, engineering plastics and mobile emissions catalysts. Given its unmatched access to OEMs and their tier suppliers, BASF is ideally positioned to leverage its strong technology position and global reach to serve the fast-growing demand for battery materials.
Technology focus on cathode active materials
In battery materials, BASF’s focus is on high-energy cathode active materials. In this area, innovation in chemistry has the biggest potential to improve battery performance. Electromobility triggers demand for batteries with improved performance. The key parameters are energy density, reliability, safety and cost. Innovative cathode active materials, where BASF has a strong intellectual property and technology portfolio, can help pave the way towards higher performance batteries and thus enable the success of electromobility.
Headquartered in Shanghai, BASF’s business unit battery materials generates annual sales in the triple-digit million euro range. Market estimates concerning the future growth of electromobility cover a wide range. BASF anticipates that electromobility applications will cause demand for cathode active materials to roughly quadruple compared with 2016 to reach ~400,000 metric tons in 2020. By 2025, we expect this demand to increase to 600,000–900,000 metric tons, equating to a market value of between €18 billion and €24 billion.
A growing network of R&D and production assets in all major regions – Asia Pacific, Europe, North America – enables BASF’s business growth in battery materials. To complement its own assets, BASF has entered a collaboration with TODA KOGYO. The partners jointly established two BASF majority-owned and controlled companies, BASF TODA Battery Materials LLC in Japan and BASF TODA America LLC in the United States. Founded in 2015 with a focus on Asia Pacific, BASF TODA Battery Materials tripled its capacity at the Onoda site in Japan in 2017. BASF TODA America combines BASF’s and TODA KOGYO’s North American production assets and was established in March 2018. BASF continues to look into opportunities for further expansion of its global asset footprint and has announced its intention to invest up to €400 million to build industry-leading production plants for cathode materials in Europe.