We create chemistry for a sustainable future
At BASF, we are passionate about chemistry and our customers. To be the world’s leading chemical company for our customers, we will grow profitably and create value for society. Thanks to our expertise, our innovative and entrepreneurial spirit, and the power of our Verbund, we make a decisive contribution to changing the world we live in for the better. This is our goal. This is what drives us and what we do best: 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, climate change and the increasing demands of a growing global population. Chemistry is key to solving many of these challenges. By combining our unique expertise with our customers’ competence, we can jointly develop profitable, innovative and sustainable solutions for these global challenges.
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 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 are designed to make the best use of available resources and help to overcome challenges.
Our aspiration is to be the world’s leading chemical company and achieve profitable growth. We aim to primarily grow organically and thus are strengthening our customer focus. Our growth strategy is based on investment in strategic growth markets and innovation-driven sectors. The Asian market continues to play a key role here. With a share of more than 40%, China is already the world’s 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 further 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 at the Verbund site in Nanjing.
Global trends provide opportunities for growth in the chemical industry
Share of population aged 60 and over worldwide
2020 to 2050
Rapid growth in volume of data
zettabytes by 2030
Driven by the emerging markets
2020 to 2050
Required reduction of greenhouse gas emissions
to achieve the 2°C goal
China the largest market:
Share of global chemical market by 2030
Growing demand for battery materials until 2030
Sources: U.N., IEA, UBS Foresight, BASF
1 The objective of these targets is to steer our business into a sustainable future and, at the same time, contribute to the implementation of the United Nations’ Sustainable Development Goals (SDGs).
2 The 2019 figure has been restated to reflect the reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings. For more information, see BASF’s Q1 2020 quarterly statement.
3 Return on capital employed (ROCE) is a measure of the profitability of our operations. We calculate this indicator as the EBIT generated by the segments as a percentage of the average cost of capital basis.
4 From 2019 onward, we have expanded our definition of water stress areas to regions in which more than 40% of available water is used by industry, household and agriculture. The definition is based on Aqueduct 3.0. This significantly increases the number of sites included in the water target and reduces the previous implementation level of BASF’s water target accordingly.
5 Accelerator products are products that make a substantial sustainability contribution in the value chain.
6 We understand relevant spend as procurement volumes with suppliers defined as “relevant”. For further information, see BASF Report 2019.
To reach our goals and be the leading company in the chemical industry for our customers, we are strengthening our performance in innovation and in operations as the leading chemical producer and plant operator. We leverage digital technologies and data to create additional value added for us and our customers. We are embedding sustainability even more deeply into the steering of our business. We want to foster a passion for our customers in all employees. We are expanding our portfolio and refining our organization to better meet customer needs using the power of our Verbund integration. To this end, we have defined strategic action areas on which will continue to base our activities.
Guidance on the use of cash
1 Organic growth
We strive to organically grow above global chemical production via innovation and capital expenditures.
2 Progressive dividend policy
We aim to increase our dividend per share every year.
3 Portfolio upgrading
We strive to enhance BASF’s portfolio through selective acquisitions in distinct growth businesses or segments and further focus the portfolio through continued pruning measures.
4 Share buybacks
Share buybacks are part of our toolbox but are currently not being considered.
Our customers are our number one priority. We want to view everything we do through the lens of customer relevance. BASF supplies products and services to around 100,000 customers1 from various sectors in almost every country in the world. Our customer portfolio ranges from major global customers and medium-sized businesses to end consumers.
customers from almost all sectors and countries in the world
Innovations and tailored solutions
in close partnership with our customers
thanks to in-depth expertise and wide range of resources
To be the world’s leading chemical company for our customers, we want to further strengthen our customer focus throughout the entire organization. This is why we are aligning our business even closer with the needs of our customers.
Our diverse portfolio – from basic chemicals to high value-added products and system solutions – means that we are active in many value chains and value creation networks. As a result, we apply various business strategies, which we flexibly adapt to the needs of individual industries. These range from cost leadership to tailored, customer-specific solutions for downstream products. This industry orientation is primarily driven forward and enhanced by the divisions.
We are continually refining our organization to even better meet the different needs of our customers. In 2019, we embedded significant parts of our functional services – including parts of research and development, IT, procurement, human resources and communications – into the operating divisions. This makes the operating divisions more agile, enabling them to target specific market demands and differentiate themselves from the competition. We also simplified processes to make the way we work more effective, more efficient and more agile. The objective is to satisfy customer requests in a more focused and targeted way and improve our reaction times so that our customers experience a new BASF.
We aim to put the customer at the center of our decisions and everything we do. Our ability to optimally combine our in-depth expertise with our wide range of resources reflects our ambition to be more than just a supplier. We position ourselves as a solution-oriented system provider. We want to work closely with our partners to develop custom solutions that are both profitable and sustainable. We contribute our expertise to optimize processes and applications together with our customers.
To even better understand our customers’ needs, we regularly ask them for feedback on our performance. In 2019, we rolled out the Net Promoter System® worldwide to establish ongoing, closer dialog with customers and further increase customer satisfaction and customer loyalty. This digital platform creates a framework to learn from feedback and respond quickly.
In 2019, we also worked on an expanded IT-based customer relationship management system. We want to roll out this state-of-the-art, even more user-friendly application in 2020 to help sales employees deliver customer support.
We are also pursuing a series of measures that will increase transparency for our customers, enhance customer service and explore joint growth potential. Our comprehensive understanding of value chains and value creation networks as well as our global setup and market knowledge remain key success factors.
Our customers’ satisfaction is the basis for our business success, which is why quality management is of vital significance for BASF. We strive to continually improve processes and products. This is also reflected in our Global Quality Policy. The majority of our production sites and business units are certified according to ISO 9001.2 In addition, we also meet industry and customer-specific quality requirements that go beyond the ISO standard.
In 2019, we once again received awards from a number of satisfied customers.
For more information on customer awards, see BASF Report 2019.
1 The method used to calculate customers in the previous year has been adjusted to the “sold-to” parties of our consolidated companies. The updated figure for 2017 is over 80,000 customers.
2 ISO 9001 is a standard published by the International Organization for Standardization (ISO) and sets out the requirements for a quality management system.
Sales by industry
· Chemicals and plastics
10–20% (in each case)
· Consumer goods
<10% (in each case)
· Energy and resources
· Health and nutrition