Innovation

A growing need for energy, food and clean water, limited resources and a booming world population – reconciling all these factors is the greatest challenge of our time. Innovations based on chemistry play a key role here, as they contribute decisively to new solutions.

We set ourselves ambitious goals: In 2015, we wanted to achieve sales of around €10 billion with new and improved products or applications that had been on the market since 2011. Despite the challenging market environment, we have achieved this sales goal. EBITDA from innovative products and processes on the market since 2011 was below the targeted amount of €2.5 billion in 2015, according to current estimates. Yet we nevertheless reached our associated goal, which was to achieve margins with innovations that exceeded those of the rest of the product portfolio. In the long term, we aim to continue significantly increasing sales and earnings with new and improved products.

Our innovative strength is based on our global team of highly qualified employees with various disciplines. We had around 10,000 employees involved in research and development in 2015. At the beginning of 2015, we arranged the central research units Process Research & Chemical Engineering, Advanced Materials & Systems Research, and Bioscience Research into three global platforms each headquartered in one of the regions particularly significant for us: Europe, Asia Pacific and North America. As knowledge and competence centers, they form the core of our global Know-How Verbund, joined by the development units in our operating divisions. BASF New Business and BASF Venture Capital supplement this network. Their task is to develop attractive new markets and new business models for BASF based on new technologies.

UNIQUE – global partnership program with leading universities

Global network in science and industry

• Network with over 600 universities, research institutes and companies
• Successful collaboration with leading universities within UNIQUE excellence program

Our global network with more than 600 excellent universities, research institutes and companies is an important part of our Know-How Verbund. We collaborate with them in many different disciplines in order to achieve our growth targets. In our excellence program UNIQUE, we are working particularly intensively with fifteen leading universities around the world. This program will strengthen and expand our portfolio with creative new projects by giving us even more direct access to scientific expertise, new technologies and talented minds from various disciplines. Also involved in UNIQUE is Heidelberg University, with whom we signed a collaboration agreement for our joint “Catalysis Research Laboratory” (CaRLa) in the spring of 2015. The research cooperation, which began in 2006, addresses current issues in homogeneous catalysis and was extended to October 2017.

Together with researchers from Harvard University – also a member of UNIQUE, as well as of our North American Center for Research on Advanced Materials (NORA) – BASF researchers developed a new method for making amorphous nanoparticles with increased solubility. This property improves the efficient uptake of, for example, vitamins and drugs in the human body. The new process is well suited to a number of different pharmaceutical, food and crop protection applications.

Strategic focus – examples

• Forward-looking project portfolio
• Strong customer and market orientation
• Worldwide presence and expansion of research and development centers

Our research pipeline comprised approximately 3,000 projects in 2015. We increased our spending on research and development by €69 million to €1,953 million (2014: €1,884 million); the operating divisions were responsible for 79% of total research and development expenditures. The remaining 21% was allocated to cross-divisional corporate research focusing on long-term topics of strategic importance to the BASF Group. Innovations based on chemistry require market-oriented research and development that is sharply focused on the needs of our customers. In order to bring promising ideas even faster to market, we regularly assess our research projects using a multistep process and focus our topics accordingly.

Another vital factor for our success is a global research and development presence. We continued to broaden our activities in 2015, especially in Asia. In May, we opened a new agricultural research station in Pune, India. The new facility focuses on global research in the areas of herbicides, fungicides and insecticides, as well as on solutions going beyond classic crop protection. In addition, we are also addressing topics there that are especially relevant for India.

The extension of our Innovation Campus Asia Pacific in Shanghai, China, was inaugurated in November, strengthening regional research capacity for new materials and systems, as well as our power of innovation for both the region and the world.

We aim to keep strengthening our research and development activities in Asia as well as in North and South America. Our plan is to conduct half of our research and development activities outside of Europe in the long term. We are adapting this to the growth in regional markets. This increased presence outside Europe creates new opportunities for fortifying and expanding customer relations and scientific collaborations, shoring up our Research and Development Verbund and making BASF an even more attractive partner and employer in the regions. Ludwigshafen remains the largest site in our Research Verbund. This was emphasized by the investment we made in a new research building opened in July. It creates modern workspaces and ideal cooperation conditions for around 200 employees in the platform Advanced Materials & Systems Research.

The number and quality of our patents attest to our power of innovation and long-term competitiveness. We filed around 1,000 new patents worldwide in 2015. For the seventh time in succession, we headed the rankings in the Patent Asset Index in 2015 – a method which compares patent portfolios industry-wide. This once again underscores BASF’s power of innovation.