BASF Investor Day Asia-Pacific Speech Brudermueller


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BASF Investor Day Asia Pacific - Keynote: The presentation covers the current status of BASF's business activities in the region Asia Pacific and the progress made to date. Future expectations for the chemical markets and factors influencing BASF's business in the region are addressed. Details on the targets and implementation of BASF's updated Asia Pacific strategy “grow smartly” are given, illustrated by concrete steps and initiatives.
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BASF Investor Day Asia-Pacific Speech Brudermueller

  1. 1. Martin Brudermüller, Vice Chairman of BASF SEAlbert Heuser, President Greater China & Functions Asia PacificGops Pillay, President South & East Asia, ASEAN, ANZWe create chemistry in Asia Pacific“grow smartly”Investor DayAsia PacificShanghai, June 5, 2013
  2. 2. BASF Investor Day Asia Pacific, June 5-6, 2013 2Cautionary note regardingforward-looking statementsThis presentation may contain forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. Forward-looking statements may include, in particular,statements about future events, future financial performance, plans, strategies,expectations, prospects, competitive environment, regulation and supply and demand.BASF has based these forward-looking statements on its views and assumptions withrespect to future events and financial performance. Actual financial performance could differmaterially from that projected in the forward-looking statements due to the inherentuncertainty of estimates, forecasts and projections, and financial performance may be betteror worse than anticipated. Given these uncertainties, readers should not put undue relianceon any forward-looking statements. The information contained in this presentation is subjectto change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to theextent required by applicable laws and regulations.
  3. 3. BASF Investor Day Asia Pacific, June 5-6, 2013 3Our global strategic frameworkWhy –Our purposeWhat –Our strategicprinciplesHow –Our valuesWe create chemistry for a sustainable futureCreative Open Responsible EntrepreneurialWe add valueas one company.We innovateto makeour customersmore successful.We drivesustainablesolutions.We formthe best team.
  4. 4. BASF Investor Day Asia Pacific, June 5-6, 2013 4123Where we areTrends in Asia Pacific“grow smartly” – Asia Pacific Strategy4 Strategic levers
  5. 5. BASF Investor Day Asia Pacific, June 5-6, 2013 5Customers from 17 countriesMore than 100 production sites148 sales offices*~16,400 employees,thereof 800 R&D staffSales in 2012: ~€12.5 billion**EBITDA in 2012: €1.2 billion***BASF in Asia Pacific* Some sites are not shown due to scale. Site and office numbers referto companies of significant size where BASF holds a stake greaterthan 50% .** Sales by location of customer*** EBIT by location of companyAll figures for 2012 have been adjusted to changes in IFRS 10 & 11Regional headquartersVerbund siteProduction siteR&D/Technical centerAsia Pacific service centerSingaporeHong KongJapanSouth KoreaMongoliaChinaPakistanIndiaSri LankaBangladeshThailandVietnamPhilippinesIndonesiaTaiwanMalaysiaAustraliaNew Zealand
  6. 6. BASF Investor Day Asia Pacific, June 5-6, 2013 6EBITDA by location of company€ billion0.*0122004200520062007200820092010201120122012r5. 9.3 8.712.514.4 14.912.5*010202004200520062007200820092010201120122012rSales by location of customer€ billion* 2012r figures restated according to changes in IFRS 10 & 11Sales and profitability in Asia Pacific+14% p.a.+11% p.a.
  7. 7. BASF Investor Day Asia Pacific, June 5-6, 2013 7FunctionalMaterials &Solutions30%Sales by segmentChemicals31%Other8%PerformanceProducts27%GreaterChina42%Australia,New Zealand (ANZ)4%South Asia11%Japan13%South Korea8%ASEAN22%€12.5billion€12.5billionSales by sub-regionAgriculturalSolutions4%Figures for 2012 adjusted to changes in IFRS and new segment structure as of January 1, 2013.Sales Asia Pacific 2012South Asia: India, Pakistan, Bangladesh, Sri LankaASEAN: Singapore, Philippines, Vietnam,Thailand, Indonesia, MalaysiaSales to third parties by location of customers
  8. 8. BASF Investor Day Asia Pacific, June 5-6, 2013 8123Where we areTrends in Asia Pacific“grow smartly” – Asia Pacific Strategy4 Strategic levers
  9. 9. BASF Investor Day Asia Pacific, June 5-6, 2013 9Emerging trends in Asia drive the needfor sustainable developmentDemands of society& government
  10. 10. BASF Investor Day Asia Pacific, June 5-6, 2013 10Macroeconomics Competition SustainabilityCapturing opportunities and addressingchallenges in Asia PacificDemands ofsociety& governmentMacroeconomics Competition Sustainability
  11. 11. BASF Investor Day Asia Pacific, June 5-6, 2013 11Real GDP (World)US$ trillionAsia Pacific will be the globalgrowth engineMacroeconomics Competition Sustainability13%29%31%27%14%25%28%33%49.7 67.12020CAGRWorld: 3.0%Asia Pacific: 4.8%14%28%30%28%52.32012201011Source: BASFAsia Pacific Rest of WorldEuropeNorth America
  12. 12. BASF Investor Day Asia Pacific, June 5-6, 2013 12China is in the process of becoming thedominant Asian economyGreater ChinaJapan South Asia South Korea ASEAN ANZReal GDP (Asia Pacific)US$ trillionMacroeconomics Competition Sustainability20107%8%7%11%33%34%8%6%7%14%41%24%13.6 21.87%7%8%11%35%32%14.92012CAGRAsia Pacific: 4.8%202012Source: BASF
  13. 13. BASF Investor Day Asia Pacific, June 5-6, 2013 13Asia Pacific is the fastest growingchemical market, outpacing GDP11%25%22%42%2.4Real chemical production excluding pharma (World)US$ trillionMacroeconomics Competition SustainabilityAsia Pacific Rest of WorldEuropeNorth America41%16%22%21%16%17%17%50%2.1 3.12020CAGRWorld: 4.0%Asia Pacific: 6.2%2012201013Source: BASF
  14. 14. BASF Investor Day Asia Pacific, June 5-6, 2013 14China is the dominating chemical marketin Asia Pacific7%8%60%14%10%1.0Real chemical production excluding pharma (Asia Pacific)US$ trillionMacroeconomics Competition SustainabilityGreater ChinaJapan South Asia South Korea ASEAN ANZ8%9%8%54%19%8%64%11%7%9%0.8 1.5CAGRAsia Pacific: 6.2%201220102020Source: BASF; CAGR Asia Pacific 6.2% calculated from 2-digit market volumes 0.84 and 1.54.142%1%1%
  15. 15. BASF Investor Day Asia Pacific, June 5-6, 2013 15Asian companies grow share in globalchemical market21%30%79%70%2006 20119531,294Sales – Global Top 100 Chemical CompaniesUS$ billionSource: BASFMacroeconomics Competition Sustainability 15Asian companiesNon-Asian companies Share of Asia Pacific companieshas increased by 9 ppts from2006 to 2011 13 new Asian companies havejoined the list of the top 100chemical producers since 2006 Asia Pacific becomes the centerof global competition Feedstock access becomes akey competitive advantage Attracting local talent, landscarcity and sustainability topicsare key challenges for growth inAsia Pacific
  16. 16. BASF Investor Day Asia Pacific, June 5-6, 2013 1667%4%3%2%24%Other local producers Sinopec/PetroChinaFormosa Chemicals Mitsubishi ChemicalsImportsCompetitive landscape in Asia Pacificbecomes more challenging100%ImportsProduction forlocal market201224%76%200234%66%Chemical demand excluding pharma in Asia PacificShare of local production and imports in total market*, 2002 – 2012 (%)* Total market is defined as apparent consumption, i.e. production – exports + importsSource: IHS Global Insight, BASF2012Macroeconomics Competition Sustainability 16
  17. 17. BASF Investor Day Asia Pacific, June 5-6, 2013 17Chemical market in Asia Pacific isdominated by local players1 Sinopec 44.9 Chemical Segment only2 Mitsubishi Chemicals 29.7estimated (business yearApril - March)3 Formosa Chemicals 23.7Formosa PetrochemicalCorp. only4 ChemChina 19.9 20115 Sumitomo Chemicals 18.3estimated (business yearApril - March)6 LG Chem 16.17 Toray 15.58 BASF 14.9adjusted to changes in IFRS:€12.5 bn9 Mitsui Chemicals 13.0estimated (business yearApril - March)10 Reliance Chemicals 12.8Petrochemical segment only;business year April - MarchChemical Sales in Asia Pacificin 2012 (€ billion)Top 10 chemical producers in Asia PacificMacroeconomics Competition Sustainability 17Source: BASF, Company reports
  18. 18. BASF Investor Day Asia Pacific, June 5-6, 2013 18Source: UNEP Global Environment Outlook 2012Macroeconomics Competition SustainabilityIncreasing need for sustainability drivenby governments and society needs18
  19. 19. BASF Investor Day Asia Pacific, June 5-6, 2013 19*According to Dow Jones Sustainability World IndexSMThe DJSI is composed of global sustainability leaders as identified by SAM’s corporate sustainability assessment, and represents the top 10% of the largest 2,500 companies in the DowJones Global Total Stock Market IndexSM based on long-term economic, environmental and social criteria.Asian companies overtook US companiesin Dow Jones Sustainability World IndexMacroeconomics Competition Sustainability21%18%52%9%201218%21%54%7%200319Asia Pacific OtherEuropeUS
  20. 20. BASF Investor Day Asia Pacific, June 5-6, 2013 20China India Japan South Korea Singapore Thailand Malaysia Indonesia Australia2011 Rank* 7 (↑3) 4 (↓2) N.A. 1 (→) 6 (↓1) 2 (↑3) 3 (→) 8 (↓1) N.A.Plan 12th Five yearplanNationalaction planon climatechangeNationalstrategicprojectsNationalstrategy forgreen growthand Five-yearplan10-Yearnational greenplanNationalenergy policy10th Five yearplanNationalmidtermdevelopmentplanCarbon planFocus area** Energy &wastemanagementsafetyWater &energyefficiencyEnergy &wastemanagementGHG reductiontargetsWastemanagementclean airwater supplyBio-energy GreenhousingwastemanagementEnergysustainablepalm oilschemeEnergy &climatechangeR&D platformOpportunity Waste watertreatmentbiodegradableplasticsSustainableagriculture &habitatFuture cityinitiativeFoster greentechnology &industriesEnvironment& watertechnologyinnovationBiogasproductione.g. agro &industry wastePromotegreentechnologyR&DInfrastructuredevelopmentincreased foodproductionGreeninitiativefunding* 2011 ranking and changes compared to 2010 according to The Asian Sustainability Rating (2011+2012) (excludes Japan and Australia)** Top focus areas listed. Detailed list availableSource: Asian Sustainability Ratios; published government documents; BASFSustainability in Asia Pacific isincreasingly addressed by governmentsMacroeconomics Competition Sustainability 20
  21. 21. BASF Investor Day Asia Pacific — June 5-6, 2013Some Asia Pacific players already have agood sustainability positioningEHS & CSRfocusProductorientedSolutionorientedValuecreationthroughsustainabilityShape industryorientationStart to tackle criticalcustomer issuesFuture outlookInternal to externalorientationHolistic businesssteeringSource: Company annual/sustainability reports, SAM Yearbook 2010 & 2011Macroeconomics Competition Sustainability 21Global playerAsia Pacific player
  22. 22. BASF Investor Day Asia Pacific, June 5-6, 2013 22123Where we areTrends in Asia Pacific“grow smartly” – Asia Pacific Strategy4 Strategic levers
  23. 23. BASF Investor Day Asia Pacific, June 5-6, 2013 23We create chemistryfor a sustainable future.BASF grows smartly in Asia Pacific
  24. 24. BASF Investor Day Asia Pacific, June 5-6, 2013 24BASF grows smartly, balancingeconomy, environment and society* Sales target 2020 after restatement for IFRS 10 & 11 Achieve sales* of €25 billion in 2020 Grow profitably by at least 2 percentagepoints above chemical production Innovate to drive sustainable solutions forcustomers Achieve OMP ratio of 75% withinvestments of ~€10 billion** Invest in cutting edgetechnologies to improveour competitiveness Create ~9,000 value-adding employmentopportunities by 2020 Engage with society andstakeholders to securelicense to operate Contribute to the socialdevelopment ofcommunities in ouroperating neighborhoodBalanceSocietyEnviron-mentEconomy** Total investments incl. partners, post IFRS 10 & 11, excl. intangibles
  25. 25. BASF Investor Day Asia Pacific, June 5-6, 2013 25123Where we areTrends in Asia Pacific“grow smartly” – Asia Pacific Strategy4 Strategic levers
  26. 26. BASF Investor Day Asia Pacific, June 5-6, 2013 26Our strategic leversInnovationMarket PortfolioPeopleInvestment Excellence
  27. 27. BASF Investor Day Asia Pacific, June 5-6, 2013 27MarketConnecting with our customers andbusiness partners to capture growthopportunities€25 billion sales by 2020 Drive industry and customer orientation Engage with stakeholders to supportsustainable development Explore opportunities in new markets27BASF Investor Day Asia Pacific, June 5-6, 2013
  28. 28. BASF Investor Day Asia Pacific, June 5-6, 2013 2820202012restatedNew Business &AcquisitionsOrganicGrowthSales contributions€ billionOrganic growth drives top line growth2012 restated = adjusted to changes in IFRS 10 & 11NewSales Target:€25 billion€12.5 billionCAGR~9%>€2 billion>€10 billion
  29. 29. BASF Investor Day Asia Pacific, June 5-6, 2013 2908160 8 16BASF’sannualsalesgrowth2010-2020(%)SRM growth 2010-2020 (%)ConsumerGoodsChemicals &PlasticsConstructionAgricultureTransportationHealth &NutritionElectronicsOthersEnergy &ResourcesSales in 2010SRM = Strategic Relevant MarketSales vs. SRM growth rate by key customer industriesDynamic industrialization drives salesBASF will generate annual sales growth above SRM growth
  30. 30. BASF Investor Day Asia Pacific, June 5-6, 2013 30BASF Industry TeamsFocus on ten most important industriesAutomotiveConstructionPackagingPaint & CoatingsPharmaIndustries Targeted BASF growth rates12 % p.a.9 % p.a.10 % p.a.7 % p.a.10 % p.a.Sales 2010Target Sales 2020Petro-chemicalsCatalystsCoatingsConstructionChemicalsPerformanceMaterialsDispersions& PigmentsNutrition& HealthPaperChemicalsIntermediatesMonomersBASFdivisionsPerformanceChemicalsMiningFood & AgricultureElectrical & ElectronicsWind EnergyTextiles
  31. 31. BASF Investor Day Asia Pacific, June 5-6, 2013 3108160 8 16SRM growth 2010-2020 (%)BASF’sannualsalesgrowth2010-2020(%)South AsiaASEANSouth KoreaGreater ChinaANZJapan3rd party net sales in 2010SRM = Strategic Relevant MarketBASF will generate highest sales growthin Greater China, South Asia and ASEANSales vs. SRM growth by sub-region
  32. 32. BASF Investor Day Asia Pacific, June 5-6, 2013 32Task forces will explore untappedmarkets in Asia PacificMongoliaMyanmarLaosCambodiaGDP (nominal) in 2012Source: GDP: United Nations; Mongolia sales: WASP; Cambodia, Laos, Myanmar: ASEAN sub-regionTotal Population2012: 72.4 million2020: 77.8 millionMongolia (GDP: US$10.2 billion) Natural mineral & mining industry Construction AgricultureLaos (GDP: US$8.9 billion) Low cost labor Agriculture (livestock & crop)Myanmar (GDP: US$54.0 billion) Natural resources (e.g. gas) Newly opening attractive marketCambodia (GDP: US$14.4 billion) Low cost labor Textile industry Agriculture
  33. 33. BASF Investor Day Asia Pacific, June 5-6, 2013 33Tap into the potential of the“Base of Pyramid”Focus areas Housing: Affordable mass housing,slum rehabilitation Food: Food fortification, packagingand storage Energy: Solar energy and windenergy Healthcare: Water purification,personal care productsApproach Explore untapped marketopportunities New collaborative business modelsfor penetrating new markets alongwith customers, NGOs andgovernment agencies Initial focus on South Asia, startingin India; potential to be extended toASEAN / IndonesiaMiddle ClassEmerging MiddleClassAffluentParts of Bottom ofPyramid
  34. 34. BASF Investor Day Asia Pacific, June 5-6, 2013 34InnovationDriving innovation in Asia for Asia andthe world~3,500 R&D staff by 2020 Expand the Asia Pacific presence within BASF’sglobal R&D network Collaborate with customers to capture newbusiness areas34BASF Investor Day Asia Pacific, June 5-6, 2013
  35. 35. BASF Investor Day Asia Pacific, June 5-6, 2013 35Address specific R&D areas for BASFin Asia PacificElectronics AgroCatalysts Polymers & MaterialsMining Water
  36. 36. BASF Investor Day Asia Pacific, June 5-6, 2013 36Expand research capabilities inAsia Pacific with new R&D centersR&D Center Korea (2013)Focus: electronicsR&D Center Singapore (2007)Focus: water, membrane, oilfieldR&D Center Australia (2012)Focus: miningInnovation Campus Asia Pacific,Shanghai (2012)Focus: polymers & materialsInnovation Campus Asia Pacific,India (in planning)Focus: life science, agroR&D Center Japan (2013)Focus: battery materials
  37. 37. BASF Investor Day Asia Pacific, June 5-6, 2013 37PortfolioEnhancing our portfolio>€2 billion sales from new business andacquisitions by 2020 Develop new businesses and growth fields Identify attractive acquisition opportunities37BASF Investor Day Asia Pacific, June 5-6, 2013
  38. 38. BASF Investor Day Asia Pacific, June 5-6, 2013 38Ongoing inflow of new growth fieldsOpportunities in identified growth fieldsHealth &NutritionConsumerGoodsConstructionTransportation ElectronicsEnergy &ResourcesAgricultureCustomerindustriesWatersolutionsHeatmanagementEnzymes PlantbiotechnologyBatteries formobilityLightweightcompositesFunctionalcrop careMedical OrganicelectronicsGrowthFieldsE-PowermanagementWind energy
  39. 39. BASF Investor Day Asia Pacific, June 5-6, 2013 39Battery materials will play a key role inadvancing electromobility of the futureFocusAdvanced cathodes and electrolytes development for lithium-ion batteries,as well as next-generation battery systemsBusiness potential 2020 Overall market size: >€20 billion globally (~€16 billion in Asia Pacific) SRM size: >€5 billion globally (~€4 billion in Asia Pacific) BASF sales potential: >€500 million globally (~€350 million in Asia Pacif.)Activities Acquisition of Novolyte Technologies (April 2012), including productionfacility, Application Technology Center in Suzhou, China New electrolytes R&D laboratory and Application Technology Center forBattery Materials starting up in Amagasaki, Japan, 2013 Ongoing collaboration with leading universities, institutes and industrypartners, as well as battery producers and OEMsTarget Position BASF as a leading global solution provider for battery and cellmanufacturers
  40. 40. BASF Investor Day Asia Pacific, June 5-6, 2013 40Portfolio development Asia PacificTowards more market driven and innovative businesses* only closed deals have been considered~€3 billion salesin Asia PacificAcquisitions Plastic additives, Pigments(Ciba) Mining Safety Solutions(Hock) Catalysts (Engelhard) Care Chemicals (Cognis) Construction Chemicals(Degussa) Electronic Chemicals(Merck, Novolyte) Health & Nutrition(Takeda, Pronova) Crop Protection(Becker Underwood)BASFCore BusinessStrong Partnerships Petronas Sinopec Shell Hua Yi Heesung Sumitomo Metal Mining HuntsmanSelected Transactions2001 − Today*Divestitures~€0.5 billion sales**in Asia Pacific Pharma (Knoll) Printing systems Polyamide fibers(Honeywell) Animal nutrition premixbusiness Styrenics (transferred intoStyrolution JV on Oct 1, 2011)Selected transactions with relevant impact in Asia Pacific*** without Styrenics
  41. 41. BASF Investor Day Asia Pacific, June 5-6, 2013 41InvestmentExpanding our local production network75% own manufactured products(OMP ratio) by 2020 Implement ambitious investment plan efficiently Form production clusters to address targetindustry needs41BASF Investor Day Asia Pacific, June 5-6, 2013
  42. 42. BASF Investor Day Asia Pacific, June 5-6, 2013 42Ambitious investment plan to realize anOMP ratio of 75% by 20206154750255075100OMP ratio(%)2012restated20202012
  43. 43. BASF Investor Day Asia Pacific, June 5-6, 2013 430510Investments in Asia Pacific(€ billion)actual* plan**Continuous investments underline ourlong-term commitment to Asia1993-2002 2003-2012 2013-202057~10* Investments 1993-2012 incl. partners and incl. intangibles ** Investments 2013-2020 incl. partners, post IFRS 10 & 11, excl. intangiblesBASF share:~75%BASF share:~80%∅ capex p.a 0.5 0.7 1.25MilestonesKuantan Nanjing Chongqing / Maoming (China)(Malaysia) (China) Kuantan (Malaysia)
  44. 44. BASF Investor Day Asia Pacific, June 5-6, 2013 44Investment focus onChina, ASEAN, and IndiaASEANGreaterChinaSouthAsiaJapanSouthKoreaANZInvestment of €10 billion until 2020** Investments incl. partners, post IFRS 10 & 11, excl. intangibles
  45. 45. BASF Investor Day Asia Pacific, June 5-6, 2013 45Major investment projects Asia PacificMDI plant Location: Chongqing, China Planned start-up: 2014 Investment: ~€860 millionIsononanol (INA) plant Location: Maoming, China Planned start-up: 2015Aroma ingredients complex Location: Kuantan, Malaysia Planned start-up: 2016 Investment: US$500 million (100%)Expansion of Verbund site Location: Nanjing, China Feasibility studies ongoing Investment: up to US$1 billion (100%)Polyurethanes, Surfactants &Dispersions Location: Dahej, India Planned start-up: 2014 Investment: €150 million
  46. 46. BASF Investor Day Asia Pacific, June 5-6, 2013 46PeopleAttracting and developing talent~9,000 new jobs by 2020 Develop a differentiated recruitment approach Establish a “Learning Campus” Redesign our motivational compensation andrewards system Engage our people in sustainability46BASF Investor Day Asia Pacific, June 5-6, 2013
  47. 47. BASF Investor Day Asia Pacific, June 5-6, 2013 47Key MeasuresStrategicPrioritiesExcellentpeopleExcellentplace to workExcellentleadersDifferentiated recruitment andemployer brandingCompetenciesPerformance ManagementLearning CampusStrong focus on development andretention to strengthen employee pipeline
  48. 48. BASF Investor Day Asia Pacific, June 5-6, 2013 48* Source: tivian GmbH and HR Business SolutionsAttrition rateLower than peer average*BASF Averagepeers in Asia6.8%vs.8.9%Striving for long-term employeecommitmentEmployee commitmentHigher than peer average*BASFAsiaPeers vs.74%57%
  49. 49. BASF Investor Day Asia Pacific, June 5-6, 2013 49cReinforce strategyCustomize businesslearningManagementinnovationFoster onecompany Regional talent program Executive MBALeaders  New leader curriculum New employee learning Learning Campus Sustainability learning Cooperation with topinstitutionsSenior executives& top talentsEmployees Academy platform Learning, consulting &coachingLearning ProgramsLearning CampusKick-off activitiesTarget areas1234The BASF place to evolve A landmark that reflects BASF valuesand people excellence Provides a unique environment forinspiring learning Designed for talent developmentactivities and regional learningprogramsLearning Campus enhances employees’development opportunities
  50. 50. BASF Investor Day Asia Pacific, June 5-6, 2013 50ExcellenceImproving operational efficiency andorganizational effectiveness€1 billion cost savings by 2020 Drive marketing and sales excellence Enhance operational excellence Optimize business enabling structures Increase collaboration efficiency50BASF Investor Day Asia Pacific, June 5-6, 2013
  51. 51. BASF Investor Day Asia Pacific, June 5-6, 2013 51€1 billion cost savings by 2020 Shared services(Finance, IS/IT, etc.) Procurement Supply chain Functional efficiencyinitiativesFunctional Excellence Savings in investmentcosts and depreciationInvestment ProcessExcellence Raw material savingsthrough yieldincreases Energy and utilities Production efficiencygainsOperationalExcellenceStructural Excellence BU efficiency targets(e.g. sales efficiency) Structural ExcellenceProgramRegional excellence initiative will driveAsia Pacific’s profitable growth
  52. 52. BASF Investor Day Asia Pacific, June 5-6, 2013 52Substantial cost savings to be achievedthrough investment process excellence Locally adjusted workflow and cooperation withregional engineering partners allows fasterproject executionProjectdurationImportedequipmentEngineeringservice costProject APast projectsin AsiaProject B-10m**Engineering measures Early transfer to Asian engineering resources Enabling more localized plant conceptsProcurement measures Higher share of technical procurement in Asia Adapt BASF specification to local supplierconditions as far as possibleSchedule measures* On average-50%*-30%*** Month on average
  53. 53. BASF Investor Day Asia Pacific, June 5-6, 2013 53Sales and Personnel costs€ billionIncreased efficiency improves productivityper employee0510152025302012 202012.5~25Personnel costsSales+100%+80% While sales are expected todouble from 2012 to 2020personnel costs will rise by80% Planned personnel increaseof 9,000 employees to achieve75% OMP ratio Personnel costs include salarycost, inflation and headcountrelated overhead costs Despite personnel increase,personnel costs as apercentage of sales willdecline from 2012 to 2020
  54. 54. BASF Investor Day Asia Pacific, June 5-6, 2013 54Innovation~3,500 R&D staffMarket€25 billion salesPortfolio>€2 billion sales fromnew biz and acquisitionsPeople~9,000 new jobsInvestment75% OMP ratioExcellence€1 billion cost savingsWe create chemistry in Asia Pacific:2020 targets
  55. 55. BASF Investor Day Asia Pacific, June 5-6, 2013 55