BASF consolidates its European capacities for XSB paper coating binders

XSB latex production in Guturribay (Spain), Kaipiainen (Finland) and Ribécourt (France) to close by mid-2010
About 40 BASF employees affected
Improved cost structure for remaining XSB plants expected

Monday, November 23, 2009. BASF’s paper chemicals division will close production of XSB (carboxylated styrol butadiene) paper coating binders at its sites in Guturribay (Spain), Kaipiainen (Finland) and Ribécourt (France) by mid-2010. This represents a reduction of about 40%, or 310KT, of the company’s total XSB capacity in Europe. By consolidating production at its plants in Hamina (Finland), Ludwigshafen (Germany) and Pischelsdorf (Austria), BASF will significantly increase capacity utilization at those plants while improving its cost structure. With production concentrated in these three locations, BASF will be well positioned to meet demand throughout Europe. BASF will work with employee representatives to develop appropriate social plans for its 40 employees at the plants to be closed.

BASF’s paper coating binder business is suffering from unsatisfactory profitability due to overcapacities in the European market, which has shrunk steadily in recent years. The decision to consolidate production was based on a thorough analysis of all six of BASF’s XSB plants in Europe with respect to their cost position and investment requirements. “With this move, we are adapting our production capacities to changes in customer demand, and the new set-up will give BASF a well-distributed network of production sites for supplying our customers throughout Europe. Through optimal utilization of the three remaining plants, we can position ourselves for the future,” said Eckhard Hilgemann, Group Vice President Coatings & Starch Europe of BASF’s Paper Chemicals division.

Dr. Fred Baumgartner, President of BASF’s Paper Chemicals division: “With these measures, we are taking a significant step in the urgently needed restructuring of BASF’s Paper Chemicals division and ensuring our profitability in the long term.”

XSB is an aqueous dispersion of styrene-butadiene copolymers used in paper coatings. It increases paper gloss, smoothness and strength by binding coating pigment particles to one another as well as to the base paper and by filling the voids between particles.

About BASF’s Paper Chemicals division

BASF’s Paper Chemicals division offers process chemicals to optimize costs and increase machine efficiency, functional chemicals to lend specific properties to paper, and finishing chemicals to improve the appearance and performance characteristics of printed paper and board. With this comprehensive portfolio, BASF is the leading supplier of paper chemicals worldwide.

BASF established Paper Chemicals as a separate division when it acquired Ciba in April 2009. The ISO 9001:2000-certified Paper Chemicals division operates sites in Europe, Asia and the Americas. For more information, go to http://www.paper-chemicals.basf.com

About BASF

BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics and performance products to agricultural products, fine chemicals as well as oil and gas. As a reliable partner BASF helps its customers in virtually all industries to be more successful. With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges such as climate protection, energy efficiency, nutrition and mobility. BASF posted sales of more than €62 billion in 2008 and had approximately 97,000 employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). Further information on BASF is available on the Internet at www.basf.com.

P-09-456