Evolving into a Global Player – Major Characteristics

Joint ventures, Styropor, Butirki - these and other terms show steps in development and attributes which are characteristic of the BASF on its path from a Palatine dye factory to the world's leading chemical company.

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The Driving Force of Internationalization

As an international bestseller, Styropor is one of BASF’s most successful products. Produced since 1951, the success of the polystyrene foam drives BASF’s development into an international company as production sites are established worldwide to increase the sales of the popular product.

Der Verbundstandort Freeport ist der führende Produzent von Grundchemikalien, Zwischenprodukten und Faserprodukten.

Um die Lagerkosten niedrig zu halten, erwarten viele Kunden, dass die BASF sie mit Waren vom Verbundstandort Freeport nach straffen Zeitplänen, z. B. just in time, beliefert. Die BASF kann diese Anforderungen erfüllen. Abdruck honorarfrei. Copyright by BASF.

The Freeport Verbund site is the leading producer of basic chemicals, intermediates and fiber products. To contain storage costs, many customers expect BASF to supply goods from the Freeport Verbund site according to tight schedules, e.g. a just-in-time system. BASF is able to meet these requirements. Print free of charge. Copyright by BASF., Der Verbundstandort Freeport ist der führende Produzent von Grundchemikalien, Zwischenprodukten und Faserprodukten.

Um die Lagerkosten niedrig zu halten, erwarten viele Kunden, dass die BASF sie mit Waren vom Verbundstandort Freeport nach straffen Zeitplänen, z. B. just in time, beliefert. Die BASF kann diese Anforderungen erfüllen. Abdruck honorarfrei. Copyright by BASF.

The Freeport Verbund site is the leading producer of basic chemicals, intermediates and fiber products. To contain storage costs, many customers expect BASF to supply goods from the Freeport Verbund site according to tight schedules, e.g. a just-in-time system. BASF is able to meet these requirements. Print free of charge. Copyright by BASF.

Tickets to New Markets

Joint ventures have a special significance for the international expansion of production. In the years following 1945, they offer BASF the possibility to reduce investment risks and to take advantage of foreign expertise. Furthermore, many Asian countries place special (regulatory) demands on foreign companies. Therefore, the construction of BASF’s production sites initially is mostly carried out through forging joint ventures with local firms.

"Filiale" der BASF in Butirki bei Moskau

Hesitant First Steps

BASF is export-oriented from the beginning. In contrast, it decides to produce overseas only under duress. BASF ventures taking this step for the first time in a Muscovite suburb named Butirki in 1877. Russian import duties induce this venture and make it a textbook example of early foreign investments of BASF. It is only in the 1960s that this pattern is abandoned and local production becomes the core of BASF's foreign strategy.

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Advertising - Reflection of a Global Approach

Historical labels reveal how much export served as a sales driver in the 19^th century. They give a vivid impression of BASF products being marketed worldwide also in the early years of its existence. The gorgeous miniature signs play a decisive role in Asia and the Middle East especially as they have to substitute written information completely of partially. This is because in these regions most of the end consumers can read neither European nor domestic instruction manuals. Moreover, the labels are meant to make the advertised product distinctive.

A few years after its foundation, BASF starts to establish a distribution channel with global scope. For the first time, it captures the benefits of an international sales network and is able to build up a direct contact to the customers. But the expansion of BASF initially remains limited to the field of exports. The company's concept is fitted to the head office in Ludwigshafen as a center of research, production and organization. Only in exceptional cases and only on a small scale, production facilities are set up abroad, for example, in Butirki, Russia, in 1877. They owe their existance to customs or patent providions.

With the start of production of Styropor in the 1950s, new production facilities for this classic insulating material are set up all over the world because shipping the very voluminous foam over longer distances would be too expensive. Since the 1960s, the focus of BASF's strategy becomes more and more international. By means of new capital expenditures, joint ventures, the construction of its own facilities and establishing Verbund sites, BASF manages to extend its worldwide presence. Research facilities on all continents follow later. To this day, BASF has evolved into a transnational company which is trading, producing and researching all over the world.