Stefano Pigozzi BASF Monomers Division Excellence in ... · Annual sales growth of €35 million/a...
Transcript of Stefano Pigozzi BASF Monomers Division Excellence in ... · Annual sales growth of €35 million/a...
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 1
BASF Monomers Division Excellence in Commodities
Stefano Pigozzi President Monomers Division Investor Day Chemicals segment May 22, 2014
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 2
Cautionary note regarding forward-looking statements
This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 3
Functional Materials & Solutions 23%
Performance Products 21%
Agricultural Solutions 7%
Oil & Gas 20%
€74 billion
Monomers represent almost 1/10th of BASF Group’s third-party sales
Other 6%
Monomers 9%
BASF Group third party sales 2013
Chemicals 23%
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 4
You experience our products every day!
… sleeping on your comfortable foam mattress
… opening your perfectly
insulated fridge
… grabbing your packaged cheese
… enjoying the surface of your laminated
tabletop
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 5
BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
BASF Investor Day Chemicals segment – Monomers, May 22, 2014
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 6
BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 7
Most of the segments we serve will grow above GDP
* Market growth, CAGR 2015 – 2020. Renewable energy: 2011-2020, “World Energy Outlook 2013" report of the International Energy Agency (IEA), "New Policies Scenario"
Automotive
Isocyanates Polyamides
Textile
Polyamides Isocyanates
Furniture
Isocyanates Glues & Resins
Renewable Energy
Inorganic Chemicals
Electrical & Electronics
Electronic Materials
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Automotive 11%
Construction 10%
Furniture 27%
Textile 14%
Other 19%
Chemicals 13%
Electrical & Electronics 6%
€6.4 billion
A balanced portfolio between the different industry segments
3rd party sales by industry (2013) in billion €
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 9
Market leader position* in key product lines
Main Competitors
* (#): Market position in 2012 ** Percent of 3rd party sales 2013 *** Incl. Ammonia/Urea/Melamine
Isocyanates
TDI (Toluene-diisocyanate): #1 globally
MDI (Methylene-diphenyldiisocyanate): #1 globally
50% captive
Polyamides & Intermediates
Polyamides for packaging films: #1 globally
71% captive
Glues & Resins***
Glues: #1 in Europe
32% captive
Inorganic Chemicals
Sodium Methylate: #2 globally
Hydrosulfite: #2 globally
50% captive
Electronic Materials
Hydrogenperoxide & Sulfuric acid: #1 in Asia & Europe
NMP (N-Methyl-pyrrolidone): #1 globally
1% captive
Huntsman
Mitsui Chemicals
Solvay
Dow
Wanhua
KPX Chemicals
Evonik Ube
Bayer Material Sciences
Borealis
DSM
Grupa Azoty
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Rest of world 7%
North America 21%
Asia Pacific 32%
Europe 40%
* OMP = Own Manufactured Products
3rd party sales by region (2013) in billion €
A globally balanced business with high OMP* shares in all regions
€6.4 billion
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 11
Global asset footprint enables fast response in all markets
.
Antwerp**
Caojing*
Schwarzheide
Singapore
Yeosu
Geismar
Freeport
Guaratinguetá
Anchieta
Shanghai
Taoyuan
Ludwigshafen
* SLIC with Huntsman / SBPC with Shanghai Hua Yi and Sinopec ** Solvin with Solvay
Production site worldwide Verbund site
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 12
Further expansion of Monomers footprint in all regions
.
Production site worldwide Verbund site
Ongoing or planned investments
Caojing
Singapore
Yeosu
Guaratinguetá
Anchieta
Shanghai
Taoyuan
Chongqing
*Ammonia investment with Yara
Geismar
Freeport*
Schwarzheide
Ludwigshafen
Antwerp
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 13
BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 14
Increased real capacity by incremental process improvements
Cost excellence: Process improvements in MDI
Annual EBIT improvement: ~ €50 million/a
2015 2012
Process improvement program MDI/Antwerp Target: Increase production
output by continuous process improvement via incremental steps
Expected benefits: – Increased sales – Production cost* reduction
€50 million EBIT
* Production cost = Personnel, maintenance and energy cost (inflation adjusted)
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Process improvement program 2000-2013 MDI/Antwerp Target: Increase production
output by continuous process improvement via incremental steps
Achieved benefits: – Increased sales – Production cost* reduction
Cost excellence: Process improvements in MDI
1992 – 2001 2009 – 2013 2002 – 2008
Annual EBIT improvement 2000-2013: ~ €220 million/a
Strong increase of production output in the last decade
* Production cost = Personnel, maintenance and energy cost (inflation adjusted)
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€7 million savings
Cyclohexane input reduction
Annual savings: ~ €7 million/a
Cost excellence: Process improvements in caprolactam
Yield improvement project caprolactam/Freeport Target: Improvement of
yields by higher product selectivity
Expected benefit: Lower raw material input
2015 2013
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Effects of process automation
Cost excellence: Process improvement via advanced automation
Annual savings: ~ €45 million/a
Energy consumption
Production rate
Headcount
Process automation program for continuous processes Target: Automation in order to
increase speed of process adaptions to changing conditions
Expected benefits: – Higher production rate and
lower energy consumption – Headcount reduction
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Benefit from low feedstock costs in the US
Cost excellence: Backward-integration to strengthen our Verbund
New ammonia plant Freeport/US Target:
– Take advantage of shale gas opportunities
– JV investment approach with Yara reduces capex, allows for world scale economics without increasing BASF‘s merchant market exposure
Expected benefit: Backward integration into a key Verbund chemical used for caprolactam, amines, isocyanates etc.
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Commercial excellence: Complexity reduction due to extended value chains
Organizational set-up until Dec 31, 2012
Annual EBIT improvement in nitric acid: ~ €2 million/a
Isocyanates TDI/MDI
Chlorine HCl
Caprolactam / Polyamides
Sulfuric acid
Nitric acid Ammonia
Hydroxylamine
Inorganics Polyurethanes Performance Polymers
Extended value chains nitric acid/Ludwigshafen Targets:
– Reduction of interfaces in production and marketing
Achieved benefits: – Improved planning
performance led to – Less storage
capacities – Additional volumes of
nitric acid available for merchant market
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Commercial excellence: Complexity reduction due to extended value chains
Annual EBIT improvement in nitric acid: ~ €2 million/a
Monomers
Organizational set-up from Jan 1, 2013
Isocyanates TDI/MDI
Chlorine HCl
Nitric acid
Hydroxylamine Caprolactam / Polyamides
Sulfuric acid
Extended value chains nitric acid/Ludwigshafen Targets:
– Reduction of interfaces in production and marketing
Achieved benefits: – Improved planning
performance led to – Less storage
capacities – Additional volumes of
nitric acid available for merchant market
Ammonia
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Commercial excellence: Product portfolio optimization in polyamides
Annual EBIT improvement: ~ €4 million/a
Shift to high-margin products polyamides/Ludwigshafen Target: Retrofit production
lines to produce high-margin Ultramid® C (Co-polyamide 6/6.6) used in film applications for food packaging
Achieved benefit: Higher profitability of the Polyamide business
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Commercial excellence: Product and application development in isocyanates
Annual sales growth of €35 million/a from 2014-2018
New foam components based on MDI Target: Comfort improvement of
conventional TDI-mattresses with a MDI-based viscoelastic gel foam layer
Achieved benefit:
– 2010-2013: Annual sales growth of 17% p.a.
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BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
BASF Investor Day Chemicals segment – Monomers, May 22, 2014 24
Growth: MDI investment in Chongqing, South-Western China
Local supply of fast growing market in South-western China
World-scale plant; 400,000 mt/a located in Chongqing area, representing a market of 270 million people
Nearly double-digit growth rates in China driven by construction and build-up of cold chain for food
Startup delayed to Q2 2015 as regulatory changes on natural gas prices affect integration concept of raw materials
MDI plant Chongqing
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TDI plant Ludwigshafen
Growth: TDI investment in Ludwigshafen, Germany
New TDI-plant with best cost position in Europe
Largest single-train TDI plant globally; 300,000 mt/a
Superior cost structure due to economies of scale and highly efficient Verbund integration
Growth story expected to continue in Eastern Europe and Africa
In Europe rebalancing of market expected by further strengthening competitive environment
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Polyamide plant Caojing
Growth: Polymerization plant in Caojing, China
Further reduction of the merchant market exposure in caprolactam
BASF´s first specialty polyamide plant in the Asia Pacific region; 100,000 mt/a
Serving the strong growth markets for specialty products particularly in the engineering plastics and packaging film industries in China
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Growth: Expanding downstream integration in Caprolactam
Caprolactam
Verbund Caprolactam outlet 2020
Energy Benzene Ammonia …
Merchant Market Downstream Businesses
82% 18%
Polyamide for
packaging films
Polyamide for
engineering plastics
BASF caprolactam positioning
Increasing share of captive use with start–up of new 100 kt/a polymerization plant in Caojing
– Growth with higher
value-added segments in downstream business
– Reduction of merchant-market exposure
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BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
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Sales to 3rd parties in billion €
A strong commodity business with good perspectives
CAGR 2013-2020 4-5%
Business perspectives
0
2
4
6
8
2013 2015E 2020E
Mid- and long term growth above GDP targeted for the steadily growing internal and external demand
Excellence program results in additional earnings of ~€200 million/a by 2020
EBITDA margin in line with BASF Group average
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BASF Monomers – Excellence in Commodities
Excellent business with strong underlying growth opportunities
Clear strategy based on cost and commercial excellence
Growth targets focused on emerging markets and downstream segments
Committed to generating above average returns and performance
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