Intermediates Excellence in the Verbund - BASF · Intermediates, March 30, 2017 11 The acetylene...

Intermediates – Excellence in the Verbund

Stefan BlankPresident

Intermediates division

Ludwigshafen

March 30, 2017

Intermediates, March 30, 2017 2

Cautionary note regarding

forward-looking statements

This presentation contains forward-looking statements. These statements are based on current

estimates and projections of BASF management and currently available information. Future

statements are not guarantees of the future developments and results outlined therein. These are

dependent on a number of factors; they involve various risks and uncertainties; and they are based

on assumptions that may not prove to be accurate. Such factors include those discussed in the

Opportunities and Risks Report from pages 111 to 118 of the BASF Report 2016. We do not assume

any obligation to update the forward-looking statements contained in this presentation.


Agenda

Intermediates at a glance1

Key technologies: Reppe and beyond2

Commodity business excellence3

How to manage the Verbund4

Summary5


Petrochemicals

Sales to 3rd parties 2016:

€5.0 billion

Supply of cracker products and

basic chemicals

Focus on olefins, alkylene oxides,

acrylic acid and oxo-alcohols


€5.7 billion


€2.7 billion

Supply of high-volume monomers and

inorganic chemicals

Focus on isocyanates, inorganics and

ammonia-based value chains

Supply of broad portfolio of

intermediates for the chemicals

industry

Focus on butanediol, amines, organic

acids and specialty intermediates

Monomers Intermediates

Part of the Chemicals segment at the heart of the Verbund


Plastics

Spandex fibers

Pharmaceuticals

Electronics

Surfactants and detergents

Crop protection

Pharmaceuticals

Gas treatment

Coatings

Construction

Food & feed

Leather

Construction

Coatings

Plastics

Detergents

Care chemicals* Percent of divisional consolidated sales in 2016, Intermediates sales to 3rd parties 2016: €2.7 billion

Intermediates – four product groups serve a wide

variety of customers and industries

Butanediol &

derivatives

Amines Acids &

polyalcohols

Acetylenics &

cabonyl derivatives


Europe

42%

Agriculture

1%

Chemicals

& plastics

87%

Health & nutrition

5%

Sales by location of customer 2016

(sales to 3rd parties)

Asia Pacific

36%

North America

19%

South America,

Africa, Middle East

3%

Consumer goods

4%

Energy & resources

3%

Sales by first customer industry 2016

(sales to 3rd parties)

Strong presence in all major regions, customers mainly

from chemical industry

€2,681 million €2,681 million


0%

100%

200%

0.0

1.5

3.0

2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA bef. SI (indexed, 2008 = 100)

Stable earnings on a high level

Sales to 3rd parties

(billion €)


■ Investments in assets close to our customers

■ Optimized assets and business models

■ Innovation: new products, processes and raw materials

■ Capturing business opportunities based on renewable raw materials

We want to grow through:

Grow top and bottom line, deliver consistently high

earnings contribution


Agenda





Summary5


Walter Reppe – the inventor of acetylene chemistry,

a cornerstone of BASF’s Intermediates division


The acetylene value chain is an integral part of the

BASF Verbund and provides a strong cash flow

* Polybutylene terephthalate ** Polyoxymethylene

Natural gas

MethanolForm-

aldehyde

1,4-ButanediolTetra-

hydrofuranPolyTHF®

POM**

Glues & resins

gamma-Butyrolactone

N-Methyl-pyrrolidone

Pyrrolidones

PBT*Engineering

plastics

Thermoplastic PU

Personal care products

Intermediates Downstream units

Other specialtiesVinylethers

Acetylene


The Intermediates division is deeply rooted

in the Verbund

Raw material supply from BASF Verbund Intermediates

C2

C3

Dimethylformamide

Ethyleneamines

Imidazoles

1,2-Propylenediamines

GBL

Methylamines

Ethanolamines

Alkylethanolamines

Morpholine/ADG

Glyoxal

Isopropanolamines

DMAPA

Neopentyl glycol

Formic acid

Propionic acid

Carbon monoxide

Ethylene glycols

Propylene oxide

Acrylonitrile

Isobutyraldehyde

Propylene

Ethylene

N-Methylpyrrolidone

Ethylene oxide

PBT

Dimethylacetamide

Methanol

C1

PolyTHF®THF

Formaldehyde

Acetylene

Natural gas

Intermediates

Butanediol

C6

* Innovation field DMAPA: Dimethylaminopropylamine, THF: Tetrahydrofuran, GBL: Butyrolactone, PolyTHF: Polytetrahydrofuran, ADG: Amino diglycole, PBT: Polybutyleneterephthalate

Renewables*


Three pathways to a renewables-based product portfolio

Performance is driver for new products, strong partnerships are key

Bio-premium only in selected markets

Cost competitiveness to petrochemical-based intermediates and raw material partnerships are key

2nd generation sugars are within strategic horizon (<10 years)

1,4-Butanediol

Succinic acid

Furandicarboxylic acid

Furfural

Isosorbide

Renewable feedstock used in Verbund

High costs for upstream products

Lead molecule: Neopentyl glycol, acrylate

dispersions**

“Me too” to petrochemical-

based products

New products Mass balance approach

Learnings

Renewable Raw Materials*

* Renewable raw materials also include oleochemicals, which are used in Performance Products for the production of fatty alcohols, vitamins, enzymes; ** Product of Dispersions & Pigments


Agenda





Summary5


■ Technology leadership

■ Leading cost structures

■ Marketing excellence

Commodity business excellence ensures profitability

even in challenging markets

Key components of commodity business excellence:


Technology leadership1,4-Butanediol example

1,4-Butanediol cash cost curve, Asia

(average cash costs, 2016) More than 80 years of experience in

acetylene-based chemistry

Continuous R&D efforts to improve

processes and develop new ones

Technological leadership on all steps

of the value chain, e.g., acetylene, BDO,

PolyTHF®

Strong integration into Verbund

Investment in cost-competitive plants

Cas

h c

os

ts

Production capacity

BA

SF

Pla

nt

3

BA

SF

Pla

nt

2

BA

SF

Pla

nt

1


Leading cost structuresConsistent focus on improving the cost base

BASF global capacity (kt/a)

Investment for a 50 kt/a plant*

* 50 kt/a THF & PolyTHF®, China, 2015

Example: Continuous improvement of PolyTHF® process

Several measures implemented to

increase capacity and reduce investment

costs

Incremental improvements include

− extended catalyst lifetime

− improved catalyst performance

− combination of process steps+57%

185

290

2007

2014

-20%

US$100 million2007

2014 US$80 million


0

1,000

2,000

3,000

Butanediol

Marketing excellenceLeveraging BASF’s global reach

Oversupplied BDO market in Asia

(kt, 2016)

1,4-Butanediol price in China

(US$/mt)

~65%

Est. capacity

Est. operating rate

1,000

2,000

3,000

2010 2011 2012 2013 2014 2015 2016 2017

Market knowledge – know your

customers, know your final applications,

know your peers

Global knowledge sharing – leveraging

BASF’s presence in all major regions

Management of supply/demand

balance – product flow optimization,

evaluation of co-producer options

Value chain approach – maintain and

develop a customer base at all steps

Supply chain management – high

reliability, effectiveness and efficiency

Agility – rapid decision making, swift

execution


Agenda





Summary5


Intermediates sources raw materials from the

BASF Verbund and supplies downstream divisions

BASF Verbund

Petrochemicals

Monomers

Performance Chemicals

Care Chemicals

Crop Protection

Performance Materials

Nutrition & Health

Market

Chemical industry

Plastics & rubber

Construction

Automotive

Food

Agriculture

Petroleum & coal

Internal sales External sales

65%35%of Intermediates

volumes is further

processed internally

of Intermediates

volumes is sold

to 3rd parties

Customer

structure


Verbund case study n-Vinylpyrrolidone

Applications:

Cosmetics

Laundry

Pharma

Agro

Membranes

Food

BASF brands:

LUVITEC®

LUVICROSS®

LUVISKOL®

DIVERGAN®

COLLACRAL®

Intermediates

Polyvinylpyrrolidone

BASF VerbundBASF Intermediates

PolyTHF®

NVP

BDO

GBL

PBT

MeOH

FAH

ACY

THF

End-user industries

ACY: Acetylene; MeOH: Methanol; FAH: Formaldehyde; BDO: 1,4-Butanediol; PBT: Polybutyleneterephthalat; THF: Tetrahydrofuran; GBL: gamma-Butyrolactone; NVP: n-Vinylpyrrolidone

BASF downstream businesses


Verbund case study PolyTHF®

Applications:

Automotive

Coatings

Adhesives & sealants

Textiles

Artificial leather

BASF brands:

PolyTHF®

Ultradur®

Elastollan®

Base resin & compounding

PolyTHF®

NVP

BDO

GBL

PBT

MeOH

FAH

ACY

THF

BASF VerbundBASF Intermediates

ACY: Acetylene; MeOH: Methanol; FAH: Formaldehyde; BDO: 1,4-Butanediol; PBT: Polybutyleneterephthalat; THF: Tetrahydrofuran; GBL: gamma-Butyrolactone; NVP: n-Vinylpyrrolidone

Intermediates End-user industriesBASF downstream

businesses


Verbund is more than pipelines

Baseload for upstream businesses, security

of supply for downstream businesses

Market-related transfer pricing

Joint and flexible planning along value

chains

Joint engineering and process development

Optimized asset utilization of swing plants,

higher value creation through use of co-

products

Joint quality management

Cross-functional knowledge exchange

Product development along value-chains

Management & mindset


Agenda





Summary5


Intermediates – a major part of the Verbund and

supplier of several downstream units

Success factors in commodity markets:

− Cost competitiveness

− Operational excellence

− Strong market knowledge

− Management of supply/demand

balances

− Management of global value chains

Innovation strategy includes focus on

renewable raw materials

Communication and collaboration are

integral parts of our Verbund

Intermediates division provides major raw

materials for BASF’s downstream units,

including Performance Materials

Intermediates, March 30, 2017 26BASF Investor Day 2015 – Keynote speech 26

Intermediates Excellence in the Verbund - BASF · Intermediates, March 30, 2017 11 The acetylene...

Documents

Transcript of Intermediates Excellence in the Verbund - BASF · Intermediates, March 30, 2017 11 The acetylene...