Segment Profile The Materials segment is composed of the Performance Materials division and the Monomers division. The Materials segment’s portfolio comprises advanced materials and their precursors for new applications and systems. These include isocyanates and polyamides as well as inorganic basic products and specialties for the plastics and plastics processing industries. We want to focus primarily on organic growth through differentiation via specific technological expertise, industry know-how and customer proximity to maximize value in the isocyanate and polyamide value chains. Divisions Performance Materials Polyurethanes, thermoplastics and foam specialties for sectors such as the transportation, construction and consumer goods industries, as well as for industrial applications Monomers Isocyanates and polyamides as well as inorganic basic products and specialties for sectors such as the plastics, automotive and construction industries Sales Factors influencing sales Income from operations before special items Million € How we create value – an example ecovio®Certified soil-biodegradable plastic for mulch films Value for BASF Annual volume of relevant market in Europe > 100,000 metric tons Value for the environment Reduction in greenhouse gas emissions up to 60% BASF has offered ecovio®, a biodegradable plastic for agricultural mulch films, since 2012. In 2019, ecovio® films became the first material to be certified as soil-biodegradable according to the European standard DIN EN 17033. Unlike the conventional polyethylene (PE) films used in many countries, ecovio® films do not have to be laboriously collected after the harvest. Instead, farmers can plough them into the soil. Naturally occurring micro-organisms in the soil recognize the structure of the film as food they can metabolize. This means that the film fully biodegrades in the soil and does not remain there as microplastic like thin PE film does. The European market for mulch films exceeds 100,000 metric tons per year, and the global market exceeds 2 million metric tons per year. If tighter legislation is implemented to protect soils from microplastics, this could provide additional sales opportunities for ecovio®. An independently reviewed life cycle assessment of agriculture in China shows that soil-biodegradable ecovio® mulch films can reduce the carbon footprint of crop production by up to 60% compared with thin PE mulch films (thickness ≤ 25 micrometers). While PE microplastic residues block access of nutrients to the plant roots, ecovio® films do not accumulate in the soil. As a result, they do not inhibit the uptake of nutrients to the plant root and enable more efficient use of fertilizers and irrigation water. ecovio® films thus help to sustain soil health, even in the production of vegetables and other crops aimed at increasing yields. Strategy Industry-leading portfolio of high-performance materials and their precursors, leveraging two integrated value chains Differentiated products and solutions for the automotive, construction and consumer goods industries The Materials segment provides a toolbox of high-performance materials that is unique in the industry. Our major integrated isocyanate and polyamide value chains are complemented by a number of specialties for the plastics and plastics processing industries. The Materials segment offers specially developed polymers and solutions to major customer industries such as automotive, construction, electrical and electronics, and consumer goods. We cater to the growing needs of consumers in all key markets by developing new applications, high-performance materials, systems and digital solutions. Application know-how, industry knowledge and customer proximity are key differentiators. BASF’s competence in this field is extended by advanced material simulation capabilities, which are a unique selling proposition in the industry. Additional differentiators, which continue to gain importance, are our product portfolio of bio-based material solutions and our sustainable production approaches. Such differentiated service and product offerings enable us to continuously expand the application horizon of our portfolio, thus generating innovative use cases and ultimately broadening markets. The segment’s global production network allows us to operate close to our customers. The new MDI synthesis unit in Geismar, Louisiana, is a major milestone toward increasing MDI production capacity in North America. This investment supports the growth of our MDI customers in the North American market. In September 2017, BASF signed an agreement with Solvay on the acquisition of Solvay’s integrated polyamide business. The E.U. Commission approved the acquisition on January 18, 2019 subject to certain conditions, including the sale of Solvay’s polyamide 6.6 (PA6.6) production facilities in Europe. Domo Chemicals was approved by the E.U. Commission as the buyer. The transactions between Solvay and Domo Chemicals and Solvay and BASF closed on January 31, 2020. More information on the transaction with Solvay In late November 2019, the official groundbreaking ceremony was held for the first plants at the planned integrated Verbund chemical production site in Zhanjiang in the southern Chinese province of Guangdong. The plants will produce engineering plastics and thermoplastic polyurethane (TPU) to serve the growing demand in various growth industries in the southern Chinese market and throughout Asia. back next