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Our strategy

Corporate Strategy

At BASF, we are passionate about chemistry and our customers. Thanks to our expertise, our innovative and entrepreneurial spirit, and the power of our Verbund integration, our innovations have decisively contributed to changing the world we live in for the better for more than 150 years. To be the world’s leading chemical company for our customers, we will grow profitably and add value to society. This is how we create chemistry for a sustainable future.

 

Today, the world is changing more rapidly than ever before, driven by demographic change and new digital technologies. Our customers in different industries and regions face diverse social and environmental challenges due to limited natural resources and increasing consumer demands. Chemistry is key to solving many of these challenges. By combining our unique expertise with our customers’ competence, we will jointly develop profitable, innovative and responsible solutions for these global trends.

Corporate purpose

We create chemistry for a sustainable future

Our purpose reflects what we do and why we do it: We create chemistry for a sustainable future. We pursue this purpose with our corporate strategy, which was updated in 2018. We want to contribute to a world that provides a viable future with enhanced quality of life for everyone. This is why we offer products and solutions that make the best use of available resources.

Our aspiration is to be the world’s leading chemical company. With our updated corporate strategy, which was announced in November 2018, we are targeting profitable growth. We aim to grow organically and thus will strengthen our customer focus. The Asian market plays an important role in our growth strategy. With a share of more than 40%, China is already the largest chemical market and drives the growth of global chemical production. By 2030, China’s share will increase to nearly 50%, and we want to participate in this growth. To drive forward our growth in this dynamic market, we plan to build an integrated Verbund site in Zhanjiang in the southern Chinese province of Guangdong. We also want to expand our existing joint venture with Sinopec in Nanjing.

 

As part of our aspiration to be the world’s leading chemical company for our customers, we want to strengthen our passion for customers throughout the entire organization. We want to grow profitably and create value for society. To achieve this, we have set ourselves ambitious financial and nonfinancial targets.

Global trends provide opportunities for growth in the chemical industry

Demographic change: 
 

Share of population aged 60 and over by 2050 

+ 130%

Digitalization: 
 

Rapid growth in volume of data 
50 zettabytes

by 2020

Population growth:
 

Driven by the emerging markets by 2050 

+ 32%

Climate change: 
 

Required reduction of greenhouse gas emissions
to achieve the 2°C goal 
– 70% by 2050

China the largest market: 
 

Share of global chemical market by 2030 

~ 50%

Electromobility: 
 

Growing demand for battery materials by 2025 
+ 300%

 

Sources: U.N., IEA, UBS Foresight, BASF

Our strategic action areas

To reach our goals and be the leading company in the chemical industry for our customers, we want to strengthen our performance in innovation and in operations as the leading chemical producer and plant operator, leverage digital ways of working across the entire company, and integrate sustainability more deeply into our business decisions. We want to strengthen our passion for our customers in all employees. We aim to strengthen our portfolio and further develop our organization to better meet customer needs using the power of our Verbund integration. We have defined six strategic action areas through which we will sharpen our customer focus. 1

Innovation

Our ambition is to be the most attractive partner for our customers whenever they are confronted with challenges that can be approached with chemistry. Our research and development competences are unique in the chemical industry. We aim to build on and leverage our position as a leading innovator to jointly develop innovations for our customers. We will design our innovation chain to be as seamless as possible so that we can bring products to the market more quickly. This means fostering a higher level of excellence throughout the entire innovation process, starting from the lab all the way to the customer.

Sustainability

We are successful in the long term when our products, solutions and technologies add value to the environment, society and the economy. We want to be a thought leader in sustainability and increase the relevance of sustainability in our decision-making processes and business models. This secures the long-term success of our company, creates business opportunities and establishes us as a key partner supporting our customers.

Operations

We are committed to running our production safely, efficiently and reliably so that we can deliver products to our customers on spec and on time. We aim to further improve the reliability and availability of our plants, as well as our agility. Above and beyond this, continuous process improvements and effective debottlenecking of our existing asset base are paramount to ensure our competitiveness.

Digitalization

We want to make digitalization an integral part of BASF’s business. This will create additional value for our customers, grow our business and improve efficiency. By promoting comprehensive digital skills among our future leaders and our entire workforce, we will ensure that the necessary resources are available.

Portfolio

We will sharpen our portfolio and focus our capital allocation more towards growing business areas. We will focus primarily on organic growth through capital expenditures and innovation, but also make targeted acquisitions where this makes strategic sense and creates value. The new segment structure will create a higher transparency regarding the steering of our businesses, the importance of value chains and the role of our Verbund. The physical, technological, market and digital integration of the Verbund continues to be at the core of our portfolio and our unique strength.

Employees

We aim to clearly position each business against its relevant competitors and establish a high-performance organization to enable us to be successful in an increasingly competitive market environment. We will adapt our business models and organizational structures so that each business unit can optimally serve its market segment. Our people are what will make the implementation of our updated strategy successful. We rely on the engagement of our employees and give them the tools and skills necessary to be able to offer our customers differentiated and customized products and services.

1 We defined six strategic action areas in our updated corporate strategy, which was announced in November 2018. They build on the four strategic principles of the “We create chemistry” strategy – we add value as one company; we innovate to make our customers more successful; we drive sustainable solutions; we form the best team – according to global trends and challenges as well as their implications for BASF.

Business and competitive environment

BASF’s global presence means that it operates in the context of local, regional and global developments and is bound by various conditions. These include:

  • Global economic environment
  • Legal and political requirements (such as European Union regulations)
  • International trade agreements
  • Industry standards
  • Environmental agreements (such as the E.U. Emissions Trading System)
  • Social aspects (such as the U.N. Universal Declaration of Human Rights)

BASF holds one of the top three market positions in around 75% of the business areas in which it is active. Our most important global competitors include Arkema, Clariant, Covestro, DowDuPont, DSM, Evonik, Formosa Plastics, Huntsman, Lanxess, SABIC, Sinopec, Solvay, Wanhua and many hundreds of local and regional competitors. We expect competitors from Asia and the Middle East in particular to gain increasing significance in the years ahead.

Last Update February 26, 2019