NEWS
BASF sets out strategy
At its Capital Markets Day in Ludwigshafen , BASF presented a corporate strategy that , it said , “ is setting a new direction ”. ‘ Winning Ways ’ is set along four strategic levers of Focus , Accelerate , Transform and Win . “ Our ambition is to be the preferred chemical company to enable our customers ’ green transformation ,” said Dr Markus Kamieth , chairman of the board of executive directors .
Focus involves redefining its approach to managing the portfolio , which differentiates between core businesses integrated into BASF ’ s value chains and the production verbund at major sites and standalone businesses that serve specific industries and compete with pure-play peers . In the former , mainly the Chemicals , Materials , Industrial Solutions and Nutrition & Care segments , BASF is among the top three global players in 75 % of the businesses .
“ We will capitalise on our market-leading positions in our core businesses through organic growth and disciplined , value-accretive acquisitions , while continuing our rigorous approach to pruning non-strategic or low-return businesses ,” Kamieth said .
The standalone businesses will gain more strategic and operational flexibility to respond to the specific requirements of the markets they operate in . Thus , the company will continue to invest in them but “ will also pursue active portfolio options where this adds value for BASF and its shareholders ”. This may , as some analysts noted , mean that BASF might cease to be the world ’ s largest chemicals company .
Within the Coatings division , BASF will prepare a divestment process for the decorative paints business in Brazil . It will also complete the legal and ERP separation of the Agricultural Solutions business by 2027 and is looking towards a potential IPO . In the midterm , the listing of a minority share is an option .
The Environmental Catalyst & Metal Solutions and Battery Materials businesses will be reported as separate divisions in the Surface Technologies segment as of 1 January 2025 . The company said that , in the light of recent market
Kamieth – BASF aims to support customers ’ green transformations developments , it is “ de-risking the path forward by focusing on filling existing capacities and exploring opportunities for collaborations along the value chain ” for Battery Materials .
With Accelerate , BASF will aim for more speed in value generation and the simplification of its organisation . It will “ empower its businesses through more streamlined and differentiated group steering ”, making its operating divisions even more accountable for business success . Further initiatives include greater use of artificial intelligence to advance productivity and accelerate innovations .
Under Transform , BASF is taking initiatives to help customers achieve their green transformation targets . This has already begun by sourcing increasing amounts of renewable electricity and volumes of renewable feedstocks . To ramp up the latter , the company will set up a dedicated unit based on its approach for renewable energy .
Transformation-related spending is expected to average € 600 million / year from 2025 to 2028 . BASF confirmed its own climate protection targets and wish to make Ludwigshafen “ a leading , sustainable chemical site for Europe and a strong pillar for BASF ’ s success ”. This has already led to some asset adjustment measures , with the closure of the adipic acid , cyclododecanone and cyclopentanone plants being announced at the end of August . In addition , BASF will adjust its non-operations structures in Ludwigshafen and bring down costs through multiple measures .
With Win , finally , the company will “ increase accountability , speed and performance orientation throughout the company ”. BASF also plans to distribute at least € 12 billion to shareholders from 2025 to 2028 . This is underpinned by new financial targets of :
• EBITDA before special items of € 10-12 billion in 2028 in mid to up-cycle conditions
• Cumulative free cash flow of over for € 12 billion in 2025-2028
• Return on capital employed around 10 % in 2028
6 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981