Segment Profile

Divisions

Petrochemicals

Broad portfolio of high-quality basic chemicals and specialties tailored to the needs of internal and external customers from industries such as chemicals and plastics

Intermediates

Comprehensive portfolio of intermediates and specialties, which are used as precursors for products such as coatings, plastics, textile fibers, pharmaceuticals and crop protection products

Sales

Factors influencing sales

Income from operations before special items

Million €

How we create value – an example

New acetylene plant in Ludwigshafen, Germany
More energy-efficient production of an intermediate essential to many value chains

Value for BASF

Annual contribution margin along the value chain

up to €1 billion

Value for the environment

Fossil resource use

around –10%

In Ludwigshafen, Germany, BASF has started up a replacement acetylene plant with a capacity of 90,000 metric tons. The new plant offers extensive digital features such as augmented reality and a reliability center, which help improve process efficiency and ensure higher plant availability. This safeguards the site’s supply of this important intermediate and further strengthens the longterm competitiveness of the Ludwigshafen site. Around 20 plants use acetylene as a versatile component of downstream products. These are essential to many value chains, including plastics, solvents and electronic chemicals. BASF customers use these products in the automotive, pharmaceutical, construction, consumer goods and textiles industries. The new plant supplies and safeguards value chains with a total annual contribution margin of up to €1 billion.

BASF has developed a proprietary, multi-stage chemical process to produce acetylene and a mixture of hydrogen and carbon monoxide, which is used as syngas, from natural gas and oxygen. Compared with the old plant, the new plant uses around 10% less fossil feedstock (such as natural gas) for this process per metric ton of end product. In addition, the new plant also generates less by-product (such as naphthalene and acetylene coke) per metric ton of end product. Energy is also saved since transportation logistics are no longer required for these by-products.

Strategy

• Integrated production facilities form core of Verbund
• Technological leadership and operational excellence provide most important competitive edge

The Chemicals segment is at the heart of the Verbund. Its production facilities supply BASF’s segments with basic chemicals and intermediates for the production of higher value-added products. In this way, the segment makes a significant contribution to BASF’s organic growth. The Chemicals segment is also a reliable supplier and provides chemicals of consistently high quality and markets them to customers in downstream industries.

We create value through process and product innovation and invest in research and development to implement new, sustainable technologies and to make our existing technologies even more efficient. Technological leadership, operational excellence and a clear focus on individual value chains are among our most important competitive advantages. We concentrate on the critical success factors of the classic chemicals business: leveraging economies of scale and the advantages of our Verbund, high asset reliability, continuous optimization of access to raw materials, lean and energy efficient processes – including reducing greenhouse gas emissions – and reliable, cost-effective logistics. Furthermore, we are constantly improving our global production structures and aligning these with regional market requirements. We continuously improve our value chains and are expanding our market position – especially in Asia – with investments and collaborations in growth markets.

Alongside the planned construction of an integrated Verbund site in Zhanjiang in the southern Chinese province of Guangdong, we are evaluating a joint investment in a chemical complex in Mundra, India, together with our partners the Abu Dhabi National Oil Company (ADNOC), Abu Dhabi, United Arab Emirates; the Adani group (Adani), Ahmedabad, India; and Borealis AG (Borealis), Vienna, Austria. The parties signed a memorandum of understanding to undertake a joint feasibility study in October 2019. BASF’s main focus is the investment in the acrylics value chain. In line with BASF’s stated goal of CO₂-neutral growth until 2030, the partners are evaluating a globally unique concept to fully power the site with renewable energy.

In October 2018, BASF and Sinopec signed a memorandum of understanding to expand the existing 50-50 joint venture, BASF-YPC Company Limited (BYC), at the Verbund site in Nanjing, China. The aim is to further strengthen the joint production of chemical products in China.

In 2020, we will expand production capacities for neopentyl glycol at the Nanjing site to continue to support our Chinese customers’ growth.

At our Verbund site in Antwerp, Belgium, we are planning a significant capacity expansion of our ethylene oxide plant. The project also includes several downstream plants, for example for the production of surfactants.

In Ludwigshafen, Germany, we further strengthened our Verbund by replacing our acetylene plant with a modern, highly efficient plant. The multi-stage startup process was completed in 2019.