Raimar JahnPresident
Polyurethanes Division
September 5, 2012
BASF’s Polyurethanes Division Driving efficiency, comfort and sustainability
BASF Investor Day Automotive September 5, 2012 2Polyurethanes
Polyurethanes – a strategic fit for BASF
Chemicals18%
Plastics15%
Performance Products21%
Other9%
Agricultural Solutions6%
Functional Solutions15%
Oil & Gas16%
€73.5billion
BASF Group sales 2011
Polyurethanes8%
BASF Investor Day Automotive September 05, 2012 3Polyurethanes
1 | BASF – leading in Polyurethanes
2 | BASF – Polyurethanes for the automotive industry
BASF Investor Day Automotive September 5, 2012 4Polyurethanes
Polyurethane demand (in million tons)
0
5
10
15
20
25
2011 2020Asia Pacific Americas
Polyurethanes is an attractive global market …
14.2
22.2
Source : Markets & Markets study 2011
Markets 2000 - 2011 2011 - 2020PU 4.9% 5.1%
GDP 2.4% 3.0%
Europe
Polyurethane market will continue to grow faster than GDP
Major growth drivers are−
Higher disposable incomes−
Increased energy efficiency requirements
−
More demanding health and comfort expectations
Key facts
CAGR
5.1% p.a.
BASF Investor Day Automotive September 5, 2012 5Polyurethanes
Automotive21%
… and BASF has an overall leading positionBASF sales by region 2011
Europe 38%
Construction 24%
South America, Africa, Middle East 7 %
Electrical, electronics 11%
Asia Pacific
35%Furniture
22%
BASF sales by first customer industry 2011
North America20%
Other14%
Footware 8%
MDI TDI PU Systems PU Specialties#1 #1 #1 #1
BASF position 2011
€5.9billion
€5.9billion
BASF Investor Day Automotive September 5, 2012 6Polyurethanes
Polyurethanes – Sales and earnings development
EBITDA (indexed)Sales* (in €
billion)
* Sales to
3rd
parties
BASF Investor Day Automotive September 5, 2012 7Polyurethanes
BASF accesses the market via different sales channels
PU basicproducts
PU systems
PU specialties
BASF Investor Day Automotive September 5, 2012 8Polyurethanes
BASF success factors–
World-scale economics–
Best-in-class cost structure–
Backward integration in Verbund–
Located in each major region
PU basic product business–
Focus on large volume applications–
Reliable outlet into systems and specialties
BASF capacities 2012–
MDI : 1,280 kt–
TDI : 560 kt
BASF MDI/TDI production sites
Production sites
Production sites (under construction)
BASF is the leading global player in MDI and TDI with regional world scale plants
BASF Investor Day Automotive September 5, 2012 9Polyurethanes
BASF accesses the market via different sales channels
PU basicproducts
PU systems
PU specialties
BASF Investor Day Automotive September 5, 2012 10Polyurethanes
BASF success factors–
Close proximity to customers–
Strong focus on application development
–
Intensive customer collaboration–
Constant flow of innovations–
Reliable supply of raw materials
PU system house business–
Broad customer portfolio–
Active in all relevant markets–
Growth through selected acquisitions –
Further extension of network
BASF set up 2012–
More than 40 system houses, technical service centres and production hubs
–
>1,400 kt sales capacity
BASF system houses
Based on an intense global network BASF is the global leader in PU systems
PU System houses
PU System houses (under construction)
BASF Investor Day Automotive September 5, 2012 11Polyurethanes
BASF accesses the market via different sales channels
PU basicproducts
PU systems
PU specialties
BASF Investor Day Automotive September 5, 2012 12Polyurethanes
PU Specialties – Strong innovation focus and close customer cooperation
BASF success factors–
Local production and expertise in all regions
–
Broad product portfolio–
High customer intimacy–
Constant flow of innovations–
Application development experience
TPU business–
Clear focus on high-value applications, e.g. automotive
–
Active in all relevant industries
MPU business–
Known as Cellasto®
–
Parts and system solutions for the automotive industry
BASF specialties sites
Specialties sitesSpecialties sites (under construction)
BASF Investor Day Automotive September 05, 2012 13Polyurethanes
1 | BASF – leading in Polyurethanes
2 | BASF – Polyurethanes for the automotive industry
BASF Investor Day Automotive September 5, 2012 14Polyurethanes
Process improvement with customized solutionsHigh flexibility and adaption to requirements
Interior comfort like–
haptics–
seating–
noise reduction–
smell/emissions
Driving comfort like–
shock absorbing–
vibration-dampening
Weight reductionReduction of energy consumption andCO2 emissionsBio-based solutions for niche applications
Polyurethanes – helping meet the current and future needs of the auto industry
Comfort SustainabilityEfficiency
BASF Investor Day Automotive September 5, 2012 15Polyurethanes
Polyurethanes – the ideal choice for car makers
Suspension:Jounce bumper,
Top mount,Coil Spring isolator
Engine encapsulation
Spoiler
Headrests
Roof module
Carpet, Floor mats
Seats, handrests, armrests
Steering wheel
ABS cable
Door side part
Dashboard
Headliner
Hatrack
Air-filterhousing
Windowencapsulation
BASF Investor Day Automotive September 5, 2012 16Polyurethanes
Cellasto® solutions offer−
Improved driving comfort−
Optimized driving dynamics−
Reduced component weight
Jounce Bumpers−
Inside every second car
Additional growth potentials with top mounts−
Standard material currently rubber−
BASF preferred supplier of Celasto®
solution−
Introduced at all Western, Japanese, Korean OEMs
Path forward with top mounts−
Introduction at Chinese OEMs−
Further multiplication at existing top mount customers
−
Grow top mount business to more than 50 million parts p.a. by 2020
Cellasto® – a true success story Inside every second car manufactured in the world
BASF Investor Day Automotive September 5, 2012 17Polyurethanes
Cellasto® – A unique BASF offering to the automotive industry
BASF Investor Day Automotive September 5, 2012 18Polyurethanes
Door handle
Innovative TPU solutions to enhance car safety
Elastollan® – Innovative TPU cable sheathings
Main applications−
Jacketing of cables for ABS and ESP systems−
Jacketing of cables for brake pad control units and other assistance solutions
−
Sheathing of charger cables
Key customer benefits−
Safety through high flame retardance−
Excellent mechanical properties−
Meeting new temperature regulations for electric and hybrid vehicles
Growth drivers−
Higher comfort and safety demands lead to more electric components and assistance systems
−
US regulation for mandatory use of rear cameras −
Additional potential through electric parking break and mandatory usage of ABS and EPS.
BASF Investor Day Automotive September 5, 2012 19Polyurethanes
Elastoflex® – Innovative solutions for light-weightconstruction
Elastoflex® E−
Paper honeycomb technology for interior applications
−
Honeycomb technology: intelligent combination of paper, glass-fiber and polyurethane systems
−
Technology proven and commercial with several OEMs like Daimler and Volkswagen
Key benefits−
Lightweight with excellent strength−
Low processing cost
Main applications−
Trunk floors−
Sky roofs
Innovative polyurethane solutions to reduce car weight
BASF Investor Day Automotive September 5, 2012 20Polyurethanes
Polyurethane solutions to improve car interior comfort
Elastoflex® E – Global solutions for soft interiorsurfaces
Elastoflex® E−
Polyurethane foam for interior applications−
Technology proven and commercial with all leading OEMs
−
Identical technology platforms globally available
Key benefits−
Soft interior surfaces−
Very robust processing−
Excellent mechanical properties
Main applications−
Dashboard−
Door panel
Next steps−
Ongoing global launch of technology platforms
PU foam
BASF Investor Day Automotive September 5, 2012 21Polyurethanes
Innovative polyurethane solutions for temperature management
Polyurethane performance foams to reduce energyrequirements of cars
Thermal insulation of car body and doors–
Reduction of energy demand for supplementary air-conditioning in summer and winter
–
Example: Smart forvision
Engine encapsulation–
Engine reaches operating temperature faster leading to fuel savings (up to 10%) and reduced CO2
-emissions–
Example: Hyundai hed-7
Next steps–
Advance development project with leading German OEM
–
Hyundai to decide on serial production
Thermal engine encapsulation
BASF Investor Day Automotive September 5, 2012 22Polyurethanes
Enhanced driving comfort through polyurethane seating foams
Elastoflex® – Tailor-made foam solutions for car seats
Market–
More than 90% of all car seats are based on polyurethanes
Growth drivers–
Number of cars produced
Success factors–
Cost leadership through world-scale production facilities
–
Innovation strengths to develop light-weight solutions
–
Broad portfolio and cross-divisional approach of BASF allowing innovative seat solutions
BASF Investor Day Automotive September 5, 2012 23Polyurethanes
Innovation & close customer interaction
Tailor-made systems & specialties
Global network and production in all regions
BASF Verbund with strong automotive competence
What makes BASF successful in Polyurethanes?
BASF Investor Day Automotive September 5, 2012 24Polyurethanes
Passion for the automotive industry drives BASF Polyurethanes
BASF Investor Day Automotive September 5, 2012 25Polyurethanes
BASF Polyurethanes speaks the language of the automotive industry
BASF Investor Day Automotive September 5, 2012 26Polyurethanes
Operational targets
Further strengthen polyurethane basic product business−
Invest in world-scale production plants for MDI and TDI (e.g. Chongqing, China; Ludwigshafen, Germany)
−
Continue to further improve production process technologies to remain cost leader
Expand polyurethane specialty business and system houses−
Remain innovation leader−
Invest in new capacities for polyurethane specialties (MPU, TPU)
and system houses
−
Continue with selected acquisitions to further broaden portfolio
BASF’s Polyurethanes targets 2015
BASF Investor Day Automotive September 5, 2012 27Polyurethanes
Financial targets
Grow sales to ~€7.7 billion by 2015, especially driven by growth in emerging markets
Increase earnings through larger share of PU systems and specialty elastomers
Ensure attractive premium on cost of capital
BASF’s Polyurethanes targets 2015
Remain global No. 1 for Polyurethanes
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