General
Information
Last Update:
Mar. 10, 2011
bottom of page

Letter from the Chairman
of the Board of Executive Directors

Dear shareholders, dear friends of BASF (handwriting)
Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE (photo)

“Over the long term, companies that
conduct business sustainably and act
responsibly will be more successful
than the competition. That is why
sustainability has long been an
integral part of BASF’s strategy.”

Dr. Jürgen Hambrecht
Chairman of the Board of Executive Directors
of BASF SE

The year 2010 was both eventful and successful. We took advantage of the strong economic upturn and put BASF on the right track for future success. We achieved record sales and earnings, but even more importantly, we once again earned a high premium on our cost of capital. And we are becoming even stronger thanks to our acquisitions of Ciba and Cognis as well as our innovations in future markets. The BASF team is continuing to write BASF’s success story – we can all be proud. I would like to thank all employees for their exceptional performance.

The BASF share was also a winner in 2010: our shares reached a new all-time high in December. With an increase of 37.4% over the year, the BASF share significantly outperformed the key benchmark and industry indices. We are adhering to our ambitious dividend policy and will propose a dividend of €2.20 per share at the Annual Meeting - an increase of 29% compared with the previous year.

Overall, we have emerged from the economic crisis stronger, demonstrating that in recent years we have successfully implemented our long-term strategy for profitable growth and made our business more cyclically robust.

Strengthening our portfolio

In 2010, we made our portfolio even more oriented to our customers so that we can create sustainable value together. Our two major acquisitions have been crucial steps related to this: We rapidly and successfully integrated the former Ciba businesses and completed the purchase of Cognis at the end of 2010. This broadens our business with innovative activities that are growing faster than the industry average. At the end of 2010, we began the divestiture process with the carve-out of a large part of our styrenics activities. We plan to combine our business with that of INEOS in a 50-50 joint venture called Styrolution, thus creating a leading global styrenics company.

Securing future growth

In order to continue to grow profitably, we are active in growth markets. Between 2011 and 2015, we are planning investments of €12.6 billion, including projects with our strong partners. These include the expansion of our Verbund site in Nanjing, China, with Sinopec and investments in world-scale production plants for specialty chemicals in Malaysia with PETRONAS. Furthermore, we are also active in exploration and pipeline projects in the Oil & Gas segment, some with our partner Gazprom.

In recent years, we have renewed our regional strategies and set ourselves ambitious goals: In Europe, Asia and North and South America, we want to grow faster than the market average and achieve sales of over €90 billion by 2020.

Opening up future markets

Through innovation, we open up new markets to help people deal with important future issues and pressing challenges: significant global population growth, rising demand for food, increasing urbanization and the growing consumption of raw materials and energy. We have therefore further increased our investments in research and development to nearly €1.5 billion.

Our research and development is mainly concentrated on these challenges, with a focus on five growth clusters: plant biotechnology, white biotechnology, nanotechnology, energy management and raw material change.

For example, we are working with partners from science and business to conduct research on materials and components for innovative battery systems for electromobility and electricity storage. Other areas include higher-yielding crops, new catalysts and processes to manufacture petrochemicals from alternative raw materials as well as processes to capture and use carbon dioxide as a synthesis building block. Overall, we are investing up to €350 million annually in research projects related to these growth clusters, amounting to 25% of our research and development expenditures.

In 2015, we aim to generate sales of up to €8 billion with product innovations – new or improved products or applications that have been on the market for less than five years.

Conducting business sustainably

Over the long term, companies that conduct business sustainably and act responsibly will be more successful than the competition. That is why sustainability has long been an integral part of BASF’s strategy.

We consider it our ongoing responsibility to continuously improve our business and we are committed to the implementation of the principles of the Global Compact. Our strategy to reduce greenhouse gas emissions and our transparent reporting are recognized by investors: For the tenth year in succession, BASF has been included in the world’s most important sustainability index, the Dow Jones Sustainability World Index (DJSI World). We were also once again represented in the prestigious Carbon Disclosure Leadership Index (CDLI) and are now included in the new Carbon Performance Leadership Index (CPLI).

We are very confident for 2011. Despite continuing risks, the global economy will grow moderately. At the same time, we are prepared for increasingly volatile markets and intensifying competition. This means: the winners will be those who are faster, more flexible and more successful than their competitors. We are convinced of our ability to master this challenge. The global BASF team will actively take advantage of opportunities and work hard to shape BASF’s future. We look forward to your support in achieving this.

Sincerely yours,

Dr. Jürgen Hambrecht
Chairman of the Board of Executive Directors of BASF SE

previous page top of page next page