Segment profile The Functional Materials & Solutions segment comprises the Catalysts, Construction Chemicals, Coatings and Performance Materials divisions. They develop and market system solutions, services and innovative products for specific sectors and customers, particularly for the automotive, electronics, chemical and construction industries as well as for household applications, sports and leisure. Divisions Catalysts Automotive and process catalysts, battery materials, precious metal trading Construction Chemicals Solutions for building structure and envelopes, interior construction and infrastructure Coatings Coatings solutions, surface treatments, decorative paints Performance Materials Polyurethanes, thermoplastics and foams Sales Factors influencing sales Income from operations before special items (million €) How we create value – an example Borocat® A new generation of high-performance refining catalysts Value for BASF >50 % Expected sales growth with Borocat® through 2022 Value for our customers and the environment up to 25 % Reduction of unwanted by-product hydrogen Refineries use fluid catalytic cracking (FCC) catalysts to extract high-value products like gasoline, diesel or liquid gas from the residues of crude oil distillation. Borocat®, our new generation of FCC catalysts, increases the yield of valuable hydrocarbons – especially from heavy crude oil with metal contaminants. As more and more crude oil of this type is being produced and processed, we expect sales growth of over 50% for Borocat® through 2022. The metals contained in crude oil present a particular challenge to further processing as they catalyze the generation of unwanted by-products like hydrogen, reducing the yield of valuable substances. Our new boron-based catalyst technology hampers these chemical by-reactions so that up to 25% less hydrogen is produced. This enables refineries to process heavier, more contaminated crude oil and use these resources more efficiently. Strategy Development of innovative products and technologies in close collaboration with our customers Focus on specialties and system solutions that allow our customers to stand out from the competition We develop innovative products and technologies in close cooperation with our customers. Our aim is to find the best solution in terms of cost and functionality, helping our customers to drive forward innovation in their industries and contribute to sustainable development. For instance, the transformation of mobility is a key trend in the automotive industry. To address this, we are developing solutions in the areas of battery materials, emission control, lightweight engineering concepts and coatings together with our customers. Our specialties and system solutions enable customers to stand out from the competition. One focus of our strategy is the ongoing optimization of our product and services portfolio and our structures according to different regional market requirements as well as trends in our customer industries. We are positioning ourselves to grow profitably and faster than the market. We aim to secure our leading market position in Europe, to profitably expand our position in the North American market and to purposefully extend our activities in the growth regions of Asia, South America, eastern Europe and the Middle East. New business fields such as battery materials play a particularly important role here. On September 18, 2017, we signed an agreement with Solvay on the acquisition of Solvay’s integrated polyamide business. The aim is to close the transaction in the third quarter of 2018 after regulatory approvals have been obtained and the consent of a joint venture partner has been received. The acquisition would complement our engineering plastics portfolio and expand our position as a solutions provider for the transportation, construction and consumer goods industries as well as for other industrial applications. We plan to integrate the global polyamide business into the Performance Materials and Monomers divisions. back next
