BASF

BASF SE

Type	Societas Europaea (FWB: BAS)
Industry	Chemicals, manufacturing, energy
Founded	1865
Headquarters	Ludwigshafen, Germany
Key people	Eggert Voscherau (Chairman of the supervisory board), Jürgen Hambrecht (CEO and Chairman of the executive board)
Products	Chemicals, plastics, performance chemicals, catalysts, coatings, crop technology, crude oil and natural gas exploration and production
Revenue	€50.69 billion (2009)[1]
Operating income	€3.677 billion (2009)[1]
Profit	€1.410 billion (2009)[1]
Total assets	€51.27 billion (2009)[1]
Total equity	€17.48 billion (2009)[1]
Employees	104,780 (2009)[1]
Website	www.basf.com

BASF SE (FWB: BAS) is the largest chemical company in the world and is headquartered in Germany.^[2] BASF originally stood for Badische Anilin- und Soda-Fabrik (Baden Aniline and Soda Factory). Today, the four letters are a registered trademark and the company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock Exchange. The company delisted its ADR from the New York Stock Exchange in September 2007.

The BASF Group comprises subsidiaries and joint ventures in more than 80 countries and operates six integrated production sites and close to 380 other production sites in Europe, Asia, Australia, Americas and Africa.^[3] Its headquarters are located in Ludwigshafen am Rhein (Rhineland-Palatinate, Germany). BASF has customers in over 200 countries and supplies products to a wide variety of industries. Despite its size and global presence BASF receives little public attention as it abandoned consumer product lines in the 90s.

At the end of 2009, the company employed more than 104,000 people, with over 48,500 in Germany alone. In 2009, BASF posted sales of €50.69 billion and income from operations before special items of about €4.9 billion. The company is currently expanding its international activities with a particular focus on Asia. Between 1990 and 2005, the company invested €5.6 billion in Asia, for example in sites near Nanjing and Shanghai, China and Katipalla in India.

History

BASF in Ludwigshafen

BASF was founded on 6 April 1865 Mannheim, in the state of Baden-Württemberg, Germany, by Friedrich Engelhorn. He had been responsible for setting up a gasworks and street lighting for the town council in 1861. The gasworks produced tar as a byproduct, and Engelhorn used this for the production of dyes. BASF was set up in 1865 to produce other chemicals necessary for dye production, notably soda and acids. The plant, however, was erected on the other side of the Rhine river at Ludwigshafen because the town council of Mannheim was afraid that the air pollution of the chemical plant could bother the inhabitants of the town. In 1866 the dye production processes were also moved to the BASF site.^[4]

Dyes

The discovery in 1856 by William Henry Perkin that aniline could be used to make intense colouring agents had led to the commercial production of synthetic dyes in England from aniline extracted from coal tar. BASF recruited Heinrich Caro, a German chemist with experience of the dyestuffs industry in England. Caro developed a synthesis for alizarin (a natural pigment in madder), and applied for a British patent on 25 June 1869. Coincidentally Perkin applied for a virtually identical patent on 26 June 1869, and the two companies came to a mutual commercial agreement about the process.^[4]

Further patents were granted for the synthesis of methylene blue and eosin, and in 1880 research began to try to find a synthetic process for indigo dye, though this was not successfully brought to the market till 1897. In 1901 some 80% of the BASF production was dyestuffs.^[4]

Soda

Sodium carbonate (soda) was produced by the Leblanc process until 1880, when the much cheaper Solvay process became available. BASF ceased to make its own and bought it from the Solvay company thereafter.^[4]

Sulfuric acid

Sulfuric acid was initially produced by the Lead chamber process, but in 1890 a unit using the Contact process was brought on stream, producing the acid at higher concentration (98% instead of 80%) and at lower cost. This followed extensive research and development by Rudolf Knietsch, for which he received the Liebig Medal in 1904.^[4]

Ammonia

The development of the Haber process from 1908 to 1912 made it possible to synthesize ammonia (a major industrial chemical as the primary source of nitrogen), and, after acquiring exclusive rights to the process, in 1913 BASF started a new production plant in Oppau, adding fertilizers to its product range. BASF also acquired and began mining anhydrite for gypsum at the Kohnstein in 1917.^[5]

IG Farben

As a result of this monopoly, BASF was able to start operations at a new site in Leuna in 1916, where explosives were produced during the First World War. On September 21, 1921, an explosion occurred in Oppau, killing 565 people. The Oppau explosion was the biggest catastrophe in German industry. Under the leadership of Carl Bosch, BASF founded IG Farben with Hoechst, Bayer, and three other companies, thus losing its independence. BASF was the nominal survivor, as all shares were exchanged for BASF shares prior to the merger. Rubber, fuels, and coatings were added to the product range. Following the appointment of Adolf Hitler as Chancellor in 1933, IG Farben cooperated with the Nazi regime, profiting from guaranteed volumes and prices, and from the slave labor provided by the government's concentration camps. IG Farben also achieved notoriety owing to its production of Zyklon-B, the lethal gas used in Nazi extermination camps. In 1935, IG Farben and AEG presented the magnetophone – the first tape recorder – at the Radio Exhibition in Berlin.^[6]

BASF Portsmouth Site in the West Norfolk area of Portsmouth, Virginia. The plant is served by the Commonwealth Railway.

World War II

The Ludwigshafen site was almost completely destroyed during the Second World War and was subsequently rebuilt. The allies dissolved IG Farben in November 1945.

BASF refounded

On July 28 1948, an explosion in which 207 people died occurred in Ludwigshafen. In 1952, BASF was refounded under its own name. With the German economic miracle in the 1950s, BASF added synthetics such as nylon to its product range. BASF developed polystyrene in the 1930s and invented Styropor in 1951.

Production abroad

In the 1960s, production abroad was expanded and plants were built in Argentina, Australia, Belgium, Brazil, France, United Kingdom, India, Italy, Japan, Mexico, Spain and the United States. Following a change in corporate strategy in 1965, greater emphasis was placed on higher-value products such as coatings, pharmaceuticals, crop protection agents and fertilizers. Following the reunification of Germany, BASF acquired a site in Schwarzheide, eastern Germany, on October 25 1990.

Takeovers

On May 30, 2006, BASF bought the Engelhard Corporation for 4.8 billion USD. This takeover is the largest takeover in the company's history. BASF is now the world's largest manufacturer of catalytic converters.

Other acquisitions in 2006 were the purchase of Johnson Polymer and the construction chemicals business of Degussa.

The acquisition of Johnson Polymer was completed on July 1, 2006. The purchase price was $470 million on a cash and debt-free basis. It provides BASF with a range of water-based resins that complements its portfolio of high solids and UV resins for the coatings and paints industry and will strengthen the company’s market presence, in particular in North America.

Also on July 1, 2006 the acquisition of the construction chemicals business of Degussa AG was completed. The purchase price for equity was just under €2.2 billion. In addition, the transaction was associated with debt of €0.5 billion.

The company agreed to acquire Ciba (formerly part of Ciba-Geigy) in September 2008.^[7] The proposed deal was reviewed by the European Commissioner for Competition, and on April 9, 2009, company acquired Ciba (formerly part of Ciba-Geigy).^[8][9]

On December 19, 2008, BASF acquired U.S.-based Whitmire Micro-Gen together with U.K.-based Sorex Ltd, Widnes, Great Britain.^[10] Sorex is a manufacturer of branded chemical and non-chemical products for professional pest management. In March 2007 Sorex was put up for sale with a price tag of about 100 million pounds.^[11]

Genetically modified organisms

Anti-biotechnology protest groups have criticized BASF's plans to hold trials of GMO potatoes in the UK.^[12] A subsidiary of Basf which focuses on GMOs is BASF Plant Science which produces the Amflora GM potato.

Business segments

BASF building

BASF headquarters, Ludwigshafen, Germany

BASF operates in a variety of markets. Its business is organized in the segments Chemicals, Plastics, Performance Products, Functional Solutions, Agricultural Solutions and Oil & Gas. The company occasionally advertises to the public using the tagline "At BASF, we don't make a lot of the products you buy. We make a lot of the products you buy better." Its slogan is "BASF The Chemical Company".

Chemicals

BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

Plastics

BASF offers a comprehensive product line and market expertise ranging from commodities to engineering and high-performance materials in thermoplastics, foams and urethanes.^[13]

1. Engineering Plastics
BASF's Engineering Plastics consists of the "4 Ultras" - Ultramid polyamide (PA) nylon-based resins, Ultradur, polybutylene terephthalate (PBT), Ultraform, polyacetal (POM), and Ultrason, polysulfone (PSU) and polyethersulfone (PES).

2. Styrenics
BASF Styrenics consists of the Foams and Copolymers. BASF's styrenic copolymers have applications in electronics, building and construction, and automotive components.

3. Polyurethanes
BASF's Polyurethanes business consists of diverse technologies and finished products. Urethane chemicals are raw materials used in rigid and flexible foams commonly used for insulation in the construction and appliance industries, furniture, packaging and transportation.

4. Foams
Foams like Styropor are generally used as insulating materials. They are eco-efficient and offer advantages over other materials in terms of cost-effectiveness, preservation of resources and environmental protection. Investments made for insulating materials usually pay for themselves within a short time and contribute to retaining and even enhancing the value of buildings.

5. Polyamides and Intermediates
BASF is a manufacturer of polyamide precursors and polyamide. BASF offer polyamide 6 and polyamide 6,6 polymers as well as precursors.

6. Biodegradable Plastics
BASF was a pioneer in manufacturing and developing biodegradable plastic, namely, Ecoflex. Ecovio, consists of Ecoflex and a high content of polylactic acid.

Performance products

BASF produces a range of performance chemicals, coatings and functional polymers. These include raw materials for detergents, textile and leather chemicals, pigments and raw materials for adhesives. Customers are the automotive, oil, paper, packaging, textile, sanitary products, detergents, construction materials, coatings, printing and leather industries.

Functional chemicals

BASF Cosmetic Solutions specializes in chemicals that many name brand skin care companies worldwide use to formulate their own products. Chemical types such as but not limited to: emulsifiers, solubilizers, anionic surfactants, glycol polymers, colorants, styling polymers, hair setting resins, conditioning agents, thickening polymers, emollients and UV absorbers.

Agricultural

BASF's crop protection division supplies agricultural products and chemicals. The company produces fungicides, herbicides and insecticides including F500 (pyraclostrobin), epoxiconazole, pendimethalin, boscalid, fipronil, seed treatment products and the Clearfield Production System.^[14] The company also researchs Nutrigenomics.^[15]

Oil and gas

BASF explores for and produces oil and gas through its subsidiary Wintershall Holding AG. In Central and Eastern Europe, Wintershall works with its Russian partner Gazprom.

Investors

72% of the BASF shares are held by institutional investors (AXA SA more than 5%, Allianz AG 2.6% and General Capital Group 2.1%). 45% of the shares are held in Germany, 17.3% in the UK and 13.5 % in the U.S.

Production

BASF's recent success is characterized by a focus on creating resource efficient product lines after completely abandoning consumer products. This strategy was reflected in production by a re-focus towards integrated production sites. The largest such integrated production site is located in Ludwigshafen employing 33,000 people. Integrated production sites are characterized by co-location of a large number of individual production lines (producing a specific chemical), which share an interconnected material flow. Piping is used ubiquitously for volume materials. All production lines use common raw material sourcing and feed back waste resources, which can be used elsewhere (e.g. steam of various temperatures, sulfuric acid, carbon monoxide). The economic incentive for this approach is high resource and energy efficiency of the overall process, reduced shipping cost and associated reduced risk of accidents. Due to the high cost of such an integrated production site it establishes a high entry barrier for competitors trying to enter the market for volume chemicals.

Environmental record

In 2006 BASF was praised by the Climate Leadership Index for their efforts in problems with climate change and greenhouse gasses in our world. In recent years the BASF Company has set aside a large portion of their R&D budget on resource conservation.^[16]

BASF has reported that one of their recent developments has been creating filters for wastewater treatments plants that help to reduce emissions.^[17]

Another recent environmental move the BASF Company has done is formed a partnership with Columbia University. The BASF Company and Columbia University came together so that they can further research “environmentally benign and sustainable energy sources”.^[18] The company has recently reported their emissions in 2006 to be “1.50 million metric tons of waste.” Even though it is a lot of waste, BASF has shown improvement in that they have steadily reduced their waste emissions in the last few years.^[17]

Chromium spill from BASF plant in Hannibal

In May 2009, accidental discharge of chromium from BASF Plant in Hannibal, Missouri into the Mississippi-river reportedly contaminated the drinking water. The local Department of Natural Resources did not react at the time to test the chromium levels, but later tests in December 2009 showed the chromium levels did not exceed regulatory safety limits.^[19]

Subsequently, BASF worked with the Missouri Department of Natural Resources (MoDNR) to resolve questions regarding the elevated level of hexavalent chromium that was detected in the effluent from one of its permitted outfalls into the Mississippi River. The company notified MoDNR about the elevated level and collected tandem water samples for testing. The state department of health was also notified and upon reviewing the test results determined that the very small amounts found were well below recommended public health screening levels.^[20]

Cooperation with Monsanto

BASF is cooperating with Monsanto Company in research, development and marketing of biotechnology.^[21]

References

External links

• Official website

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