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Global
Factbook
Global
Factbook

Strategy

Corporate strategy

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.

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 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

Demographic change: 
 

Share of population aged 60 and over worldwide

+100%

2020 to 2050

Digitalization: 
 

Rapid growth in volume of data 
456

zettabytes by 2030

Population growth:
 

Driven by the emerging markets

+25%

2020 to 2050

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%

by 2030

Electromobility: 
 

Growing demand for battery materials until 2030

+20-25%

per year

 

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

 

Status of Target Achievement in 20191

Grow sales volumes faster than global chemical production every year

Status of Target Achievement in 2019:
– 3% (Global chemical production: 1.8%)
(2018: 1%)

 

Grow CO2-neutrally until 2030
(Development of carbon emissions compared with baseline 2018)

Status of Target Achievement in 2019:
– 8.2% (2018: 22 million metric tons)

Achieve €22 billion in Accelerator sales5 by 2025

Status of Target Achievement in 2019:
€15.0 billion (2018: €14.3 billion)

Increase EBITDA before special items by 3% to 5% per year2

Status of Target Achievement in 2019:
– 10% (2018: –14%)

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

Status of Target Achievement in 2019:
0.3 (2018: 0.3)

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

Status of Target Achievement in 2019:
0.3 (2018: 0.3)

Achieve a return on capital employed (ROCE)3 considerably above the cost of capital percentage every year

Status of Target Achievement in 2019:
7.7% (Cost of capital: 10%) (2018: 12.0%)

Introduce sustainable water management at all production sites in water stress areas4 and at all Verbund sites by 2030

Status of Target Achievement in 2019:
35.8% (2018: 50%)

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

Status of Target Achievement in 2019:
79% (2018: n.a.)

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

Status of Target Achievement in 2019:
€3.30 (2018: €3.20) 

Increase the proportion of women in leadership positions with disciplinary responsibility to 22–24% by 2021

New target for 2030: 30%

Status of Target Achievement in 2019:
23% (2018: 22%)

Cover 90% of our relevant spend6 with sustainability evaluations by 2025

Status of Target Achievement in 2019:
81% (2018: 60%)

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

Status of Target Achievement in 2019:
52% (2018: n.a.)

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.

Our strategic action areas

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.

Portfolio

We will sharpen our portfolio and focus our capital allocation toward growth areas. We will focus primarily on organic growth through capital expenditures and innovation. We also make targeted acquisitions where this makes strategic sense and creates value and divest businesses that are no longer a strategic match. Our segment structure creates a high level of 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 is at the core of our portfolio and our strengths.

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 industry-leading. We aim to build on and leverage this strength to develop innovations together with our customers. We want to continuously improve our innovation processes so that we can bring products to the market more quickly.

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, which is why we are increasing the relevance of sustainability in our steering 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 produce safely, efficiently and reliably so that we can deliver products to our customers on spec and on time. We strive to continually 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

Digitalization is an integral part of our business. This creates value added for our customers, grows our business and improves efficiency. We are extensively promoting digital skills among our employees to ensure that the necessary resources are always available to leverage the opportunities of digitalization to the benefit of our customers.

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. Our people are what will make the implementation of our 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, services and solutions. Our tailored business models and organizational structures ensure that each business unit can optimally serve its market segment.

Guidance on the use of cash

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.

Last Update June 19, 2020