Global
Factbook

Strategy

Corporate strategy

At BASF, we are passionate about chemistry and our customers. We want to be the world’s leading chemical company for our customers, grow profitably and create value for society. Thanks to our expertise, our innovative and entrepreneurial spirit, and the power of our Verbund integration, we make a decisive contribution to changing the world for the better. This is our goal. This is what drives us and what we do best: We create chemistry for a sustainable future.


The world is facing major challenges. Climate change is advancing, the world’s population is growing and so is its need for food. More and more people live in cities and the demand for individual mobility is rising. At the same time, natural resources are limited. More than ever before, we need solutions that make sustainable growth possible. Chemistry plays a key role here. It can help to overcome global challenges in almost all areas of life. By combining our expertise with our customers’ competence, we can together develop sustainable and profitable solutions.

Corporate purpose

We create chemistry for a sustainable future

Our innovations, products and technologies help to use natural resources more efficiently, produce enough food for everyone, reduce emissions, enable climate-smart mobility, improve the capabilities of renewable energy, and make buildings more energy efficient, among other things. Our purpose reflects what we do and why we do it: We create chemistry for a sustainable future.

We want to continue to grow profitably and make a positive contribution to society and the environment. We see disruptive changes in the chemical industry – like the advance of digitalization, the development of circular economy models or the transformation to climate-neutral production – as an opportunity. We have set ourselves ambitious targets along the entire value chain. Our customers and their needs are at the core of our strategy. We want to maintain our leading position in an increasingly competitive environment. To achieve this, we are accelerating our innovation processes and deepening cooperation with our customers. We are systematically aligning our portfolio with growth areas and integrating sustainability into our value chains even more strongly. Our Verbund structure is the basis for efficient, safe and reliable production both now and in the future. We leverage digital technologies to continuously improve processes and customer relationships, for example.

We create a working environment that best enables our employees to contribute to BASF’s success.

Global trends provide opportunities for growth in the chemical industry

Population growth:
 

Driven by the emerging markets 

+25%

2020 to 2050

Digitalization: 
 

Rapid growth in volume of data 
456

zettabytes in 2030

China the largest market: 
 

Share of global chemical market

~50%

by 2030 

Climate change: 
 

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

by 2050 (baseline 1990)

Circular economy:
 

Non-recycled plastic waste worldwide

~200

million metric tons per year

Electromobility: 
 

Growing demand for battery materials until 2030 
~25%

per year

 

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

 

Status of Target Achievement in 20201

Profitable growth

Achieve a return on capital employed (ROCE) considerably above the cost of capital percentage every year

Target
 

>9%

2020 status

1.7%

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SDG2

Grow sales volumes faster than global chemical production every year

Target
 

>–0.4%

2020 status

–0.5%

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SDG

Increase EBITDA before special items by 3%–5% per year

Target
 

3%–5%

2020 status

–10.7%

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SDG

Increase the dividend per share every year based on a strong free cash flow

Target
 

>€3.30

2020 status

€3.30

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SDG

Effective climate protection1

We want to reduce our absolute CO2 emissions3 by 25 percent by 2030.

(Development of carbon emissions compared with baseline 2018)

Target

 

≤16.4 MMT

2020 status

20.8 MMT

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SDG

We aim to achieve net zero CO2 emissions3 by 2050.

Sustainable product portfolio

Achieve €22 billion in Accelerator sales by 2025

Target
 

€22.0 billion

2020 status

€16.7 billion

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SDG

Responsible procurement

Cover 90% of our relevant spend with sustainability evaluations by 2025

Target
 

90%

2020 status

80%

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SDG

Have 80% of our suppliers improve their sustainability performance upon re-evaluation

Target
 

80%

2020 status

68%

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SDG

Resource efficiency and safe production

Reduce worldwide process safety incidents per 200,000 working hours to ≤0.1 by 2025

Target

 

≤0.1 

2020 status

0.3

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SDG

Reduce the worldwide lost-time injury rate per 200,000 working hours to ≤0.1 by 2025

Target

 

≤0.1

2020 status

0.3

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SDG

Introduce sustainable water management at our production sites in water stress areas and at our Verbund sites by 2030

Target

 

100%

2020 status

46.2%

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SDG

Employee engagement and diversity

Increase the proportion of women in leadership positions with disciplinary responsibility to 30% by 2030

Target
 

30%

2020 status

24.3%

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SDG

More than 80% of our employees feel that at BASF, they can thrive and perform at their best

Target
 

>80%

2020 status

82%

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SDG

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Most important key performance indicators

1 Targets as published in the BASF Report 2020; CO2 targets updated on March 26, 2021

2 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)

3 The goal includes Scope 1 and Scope 2 emissions. Other greenhouse gases are converted into CO2 equivalents according to the Greenhouse Gas Protocol.

Our strategic action areas

We want to maintain our leading position in an increasingly competitive environment. To achieve this, we are accelerating our innovation processes and deepening cooperation with our customers. We are systematically aligning our portfolio with growth areas and integrating sustainability into our value chains even more strongly. Our Verbund structure is the basis for efficient, safe and reliable production both now and in the future. We leverage digital technologies to continuously improve processes and customer relationships, for example. We create a working environment that best enables our employees to contribute to BASF’s success.

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Innovation is the bedrock of our success. BASF is an innovation leader in the chemical industry, with around 10,000 employees in research and development and R&D spending of around €2.1 billion. We continue to build on these strengths by bringing research and development closer together and making our customers’ demands a greater part of our innovation process. We involve them at an earlier stage and are expanding our partnerships with customers and external partners.

     More     

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A key driver for us is sustainability. We want to create value for the environment, society and business with our products, solutions and technologies. We pledged our commitment to sustainability in 1994 and since then, have systematically aligned our actions with the principles of sustainability. We want to further cement our position as a thought leader in sustainability, which is why we are increasing the relevance of sustainability in our steering processes and business models. This establishes us as a key partner supporting our customers, opens up new growth areas and secures the long-term success of our company.

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Our core business is the production and processing of chemicals. Our strength here lies – both now and in the future – in the Verbund and its integrated value chains. The Verbund offers us many technological, market, production-related and digital advantages. Our comprehensive product portfolio, which ranges from basic chemicals to custom system solutions, enables us to meet the increasingly diverse needs of our customers with a differentiated offering. This is complemented by our global presence and decades of experience, which have allowed us to develop an in-depth understanding of the needs and landscape of local markets. At the same time, value chains in integrated Verbund structures can be steered efficiently to conserve resources and reduce CO2 emissions.

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Digitalization is an integral part of our business. We want to significantly improve the availability and quality of our process data. To achieve this, we will digitalize processes at more than 420 plants worldwide by 2022. We will systematically analyze this data to further automate processes and in this way, increase efficiency, for example with predictive maintenance. In addition, combining internal and external data provides many new opportunities to manage our businesses more efficiently, improve processes and create value added for our customers.

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The acquisitions and divestitures made in the past few years have oriented our portfolio toward innovation-driven growth areas. The acquisition of the integrated polyamide business from Solvay and the purchase of various businesses from Bayer further strengthened our positions in engineering plastics and in the agricultural sector. We completed the divestiture of our construction chemicals business to Lone Star in 2020 as planned and aim to close the sale of our pigments business to DIC, subject to the fufillment of clearance conditions by DIC.

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Our employees are key to BASF’s success. That is why we believe that it is important to have a working environment that fosters employees’ individual talents and enables them and their teams to perform at their best. We are pursuing three action areas to make our high-performance organization even more so: empowerment, differentiation and simplification. We value diversity in people, opinions and experience as being crucial to creativity and innovation. We embrace bold ideas, help our employees to implement them and learn from setbacks.

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Use of cash – clear focus on long-term shareholder value

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Our customers are our number one priority. BASF supplies products and services to around 90,000 customers1 from various sectors in almost every country in the world. Our customer portfolio ranges from major global customers and small and medium-sized enterprises to end consumers. Our comprehensive product portfolio means that we are active in many value chains and value creation networks. We use various business strategies, which we adapt to the needs of individual industries and markets. These range from cost leadership in basic chemicals to tailored, customer-specific system solutions.


We want to be our customers’ most attractive partner for all challenges that can be solved with chemistry. This is why we continue to drive forward our focus on customers and their needs. We are refining our organizational structure so that our operating divisions can flexibly address specific market requirements and differentiate themselves from the competition. In addition, we are simplifying and digitalizing our processes to make the way we work more effective, more efficient and more agile.

We are continuously increasing transparency for our customers and improving our customer service with a range of measures. For instance, we have used the Net Promoter System® since 2019. We are constantly improving our problem-solving skills, product quality and delivery reliability based on customer feedback. In 2020, we also started the global rollout of Salesforce, a new, integrated ITbased customer relationship management system. The user-friendly application helps sales employees deliver even better customer support and simplifies their work.

Above and beyond this, we want to intensify cooperation with our customers and leverage growth potential together with them. For instance, we have created interdisciplinary teams in our business units to even better and more quickly address the needs of our most important customers. Cooperation and innovation are also the focus at our Creation Centers in Ludwigshafen, Germany; Mumbai, India; Shanghai, China; and Yokohama, Japan. These creative centers bring together our comprehensive materials, design, and – in particular – our digital development expertise in high-performance plastics using the latest visualization and collaboration technologies. This enables us to transform our customers’ ideas into tailored products and applications even more quickly – everything in one place, from initial inspiration to solution.

Our customers’ satisfaction is the basis for our 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 such as IATF 16949 certification for the automotive industry.

In 2020, we once again received awards from a number of highly satisfied customers.

For more information on customer awards, see BASF Report 2020.
 

1 The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.

2 ISO 9001 is a standard published by the International Organization for Standardization (ISO) and sets out the requirements for a quality management system.

BASF sales by industry 2020

Direct customers  
> 20% Chemicals and plastics | Transportation
10%–20% Agriculture | Consumer goods
< 10% Construction | Electronics | Energy and resources | Health and nutrition
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Ultrasim®: Shorter development times thanks to virtual simulation

Technical progress requires innovative materials. This is why engineering plastics are being used in more and more sectors and applications. They are often significantly lighter than conventional materials, are usually easier to process and offer advantages such as heat and impact resistance or mechanical strength. As a leading manufacturer, BASF not only offers a comprehensive portfolio of high-performance plastics, but also has extensive expertise in computer-aided engineering (CAE). Ultrasim, our virtual simulation tool, covers the entire process chain – from the selection of suitable materials and the development of virtual prototypes to the optimal production process for the component. Our customers find out quickly, precisely and reliably how our materials behave in specific applications. This reduces development times and saves costs for complex tests.

More information on Ultrasim

Last Update June 8, 2021