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BASF’s Strategy for Europe

Published on 2005-10-07. Author : SpecialChem

BASF is raising its European profile in order to be even more successful in a fast and dramatically moving environment. The company presented its new Europe Strategy 2015 at a press conference in Ludwigshafen on 6th October 2005. Over the next few years, BASF wants to outperform the market, in this way winning market share, cooperating more closely with its customers, and expanding its market position even more systematically in certain countries.

"BASF's roots are in Europe," said Eggert Voscherau, Vice Chairman of the Board of Executive Directors of BASF Aktiengesellschaft. "If we look just at the global EBIT of our chemical businesses – in other words our core business - Europe has contributed more than half for many years. The majority of BASF's employees work in this region, and in the future we intend to continue to invest around €1 billion per year here, subject to profitability," he continued. It therefore only made sense, Voscherau added, for BASF to plan to expand its business in its home market over the next few years.

According to Voscherau, a focus on enhancing efficiency in all areas will continue to play an important role on the one hand. "Efficiency improvements in production, infrastructure and service alone have resulted in long-term savings of €480 million in Ludwigshafen. A further €250 million in savings comes, for example, from optimizing local structures in Europe. This amounts to a total of €730 million in cost savings per year in Europe over the long term."

On the other hand, BASF plans to place a stronger focus on customers, sectors and countries in order to increase its European sales and significantly outperform the market by 2015. "That means that in certain segments we want to make significant gains in market share", explained Dr. Walter Seufert, President of BASF in Europe. "As a customer-focused company, we want to support our customers' growth and in this way together become even more innovative and more successful in our markets." This support can take place in a wide variety of ways – from joint research projects and product developments through intelligent logistical solutions to environmental issues – said Seufert. This cooperative approach aims to give BASF an enormous competitive edge because very few companies are able to offer their customers such a broad service.

At the same time, BASF will bundle its broad expertise more effectively within the company and will focus on offering products and solutions for an entire sector, such as the construction or packaging industry.

In contrast to the low economic growth rate of around 2 to 3 percent in Western Europe, Eastern Europe offers high growth rates and dynamic markets. BASF has already positioned itself well in this region, since it established sales organizations in every Eastern European country several years ago. BASF's major production facilities in central Europe, in Ludwigshafen for example, are so centrally located that the company is able to supply the whole of Europe swiftly and cost effectively. "One thing is clear to us: Without neglecting our traditionally strong Western European market and its opportunities, we want to take advantage of the enormous opportunities for growth in Eastern Europe as best we can. And that's also reflected in our growth target: we want to double our sales in Eastern Europe from €1 billion to €2 billion by 2010," said Seufert.

BASF's strong focus on its operations in its domestic European market is reflected in its investment programs. In the first half of 2005 alone, the company spent close to half a billion euros on plant and equipment in Europe. This was 10 percent more than in the same period of 2004. Examples of capital expenditure projects include the new HPPO plant for the production of propylene oxide and the expansion of steam cracker capacity, both in Antwerp in Belgium.

Source: BASF


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