Intermediates Excellence in the Verbund

Transcription

1 Stefan Blank President Intermediates division Ludwigshafen March 30, 2017 Intermediates Excellence in the Verbund

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 We do not assume any obligation to update the forward-looking statements contained in this presentation. Intermediates, March 30,

3 Agenda Intermediates at a glance Key technologies: Reppe and beyond Commodity business excellence How to manage the Verbund Summary Intermediates, March 30,

4 Part of the Chemicals segment at the heart of the Verbund Petrochemicals Sales to 3 rd parties 2016: 5.0 billion Supply of cracker products and basic chemicals Focus on olefins, alkylene oxides, acrylic acid and oxo-alcohols Monomers Sales to 3 rd parties 2016: 5.7 billion Supply of high-volume monomers and inorganic chemicals Focus on isocyanates, inorganics and ammonia-based value chains Intermediates Sales to 3 rd parties 2016: 2.7 billion Supply of broad portfolio of intermediates for the chemicals industry Focus on butanediol, amines, organic acids and specialty intermediates Intermediates, March 30,

5 Intermediates four product groups serve a wide variety of customers and industries Butanediol & derivatives Amines Acids & polyalcohols Acetylenics & cabonyl derivatives Plastics Spandex fibers Pharmaceuticals Electronics Surfactants and detergents Crop protection Pharmaceuticals Gas treatment Coatings Construction Food & feed Leather Construction Coatings Plastics Detergents Care chemicals Intermediates, March 30, 2017 * Percent of divisional consolidated sales in 2016, Intermediates sales to 3rd parties 2016: 2.7 billion 5

6 Strong presence in all major regions, customers mainly from chemical industry Sales by location of customer 2016 (sales to 3 rd parties) Sales by first customer industry 2016 (sales to 3 rd parties) South America, Africa, Middle East 3% Health & nutrition 5% North America 19% Europe Agriculture 2,681 million 42% 1% 2,681 million Chemicals & plastics 87% Asia Pacific 36% Consumer goods 4% Energy & resources 3% Intermediates, March 30,

7 Stable earnings on a high level Sales to 3 rd parties (billion ) EBITDA bef. SI (indexed, 2008 = 100) % % % Intermediates, March 30,

8 Grow top and bottom line, deliver consistently high earnings contribution We want to grow through: 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 Intermediates, March 30,

9 Agenda Intermediates at a glance Key technologies: Reppe and beyond Commodity business excellence How to manage the Verbund Summary Intermediates, March 30,

10 Walter Reppe the inventor of acetylene chemistry, a cornerstone of BASF s Intermediates division Intermediates, March 30,

11 The acetylene value chain is an integral part of the BASF Verbund and provides a strong cash flow Glues & resins Intermediates Downstream units Methanol Formaldehyde POM** Natural gas Acetylene 1,4-Butanediol Tetrahydrofuran PolyTHF Thermoplastic PU PBT* gamma- Butyrolactone N-Methylpyrrolidone Pyrrolidones Engineering plastics Personal care products Vinylethers Other specialties Intermediates, March 30, 2017 * Polybutylene terephthalate ** Polyoxymethylene 11

12 The Intermediates division is deeply rooted in the Verbund C6 Renewables* Acetylene Formaldehyde Intermediates Butanediol THF GBL PBT PolyTHF N-Methylpyrrolidone C1 Natural gas Methanol Carbon monoxide Methylamines Formic acid Propionic acid Dimethylformamide Dimethylacetamide C2 Ethylene Ethylene oxide Ethylene glycols Ethanolamines Alkylethanolamines Morpholine/ADG Glyoxal Ethyleneamines Imidazoles C3 Propylene Propylene oxide Acrylonitrile Isobutyraldehyde Isopropanolamines DMAPA Neopentyl glycol 1,2-Propylenediamines Raw material supply from BASF Verbund Intermediates Intermediates, March 30, 2017 * Innovation field DMAPA: Dimethylaminopropylamine, THF: Tetrahydrofuran, GBL: Butyrolactone, PolyTHF: Polytetrahydrofuran, ADG: Amino diglycole, PBT: Polybutyleneterephthalate 12

13 Three pathways to a renewables-based product portfolio Renewable Raw Materials* Me too to petrochemicalbased products New products Mass balance approach 1,4-Butanediol Succinic acid Furandicarboxylic acid Furfural Isosorbide Learnings 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 2 nd generation sugars are within strategic horizon (<10 years) Renewable feedstock used in Verbund High costs for upstream products Lead molecule: Neopentyl glycol, acrylate dispersions** Intermediates, March 30, 2017 * Renewable raw materials also include oleochemicals, which are used in Performance Products for the production of fatty alcohols, vitamins, enzymes; ** Product of Dispersions & Pigments 13

14 Agenda Intermediates at a glance Key technologies: Reppe and beyond Commodity business excellence How to manage the Verbund Summary Intermediates, March 30,

15 Commodity business excellence ensures profitability even in challenging markets Key components of commodity business excellence: Technology leadership Leading cost structures Marketing excellence Intermediates, March 30,

16 BASF Plant 1 BASF Plant 2 BASF Plant 3 Cash costs Technology leadership 1,4-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 Production capacity Intermediates, March 30,

17 Leading cost structures Consistent focus on improving the cost base Example: Continuous improvement of PolyTHF process BASF global capacity (kt/a) Investment for a 50 kt/a plant* % 290 Several measures implemented to increase capacity and reduce investment costs Incremental improvements include extended catalyst lifetime improved catalyst performance combination of process steps 2007 US$100 million 2014 US$80 million -20% Intermediates, March 30, 2017 * 50 kt/a THF & PolyTHF, China,

18 Marketing excellence Leveraging BASF s global reach Oversupplied BDO market in Asia (kt, 2016) 3,000 2,000 1,000 0 ~65% Butanediol 1,4-Butanediol price in China (US$/mt) Est. operating rate Est. capacity 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 3,000 2,000 1, Supply chain management high reliability, effectiveness and efficiency Agility rapid decision making, swift execution Intermediates, March 30,

19 Agenda Intermediates at a glance Key technologies: Reppe and beyond Commodity business excellence How to manage the Verbund Summary Intermediates, March 30,

20 Intermediates sources raw materials from the BASF Verbund and supplies downstream divisions Internal sales External sales BASF Verbund Petrochemicals Monomers Performance Chemicals Care Chemicals Crop Protection Performance Materials Nutrition & Health 35% of Intermediates volumes is further processed internally Customer structure 65% of Intermediates volumes is sold to 3rd parties Market Chemical industry Plastics & rubber Construction Automotive Food Agriculture Petroleum & coal Intermediates, March 30,

21 Verbund case study n-vinylpyrrolidone Intermediates BASF downstream businesses End-user industries GBL NVP ACY BDO PBT Polyvinylpyrrolidone MeOH BASF brands: LUVITEC Applications: Cosmetics FAH THF LUVICROSS LUVISKOL Laundry Pharma PolyTHF DIVERGAN COLLACRAL Agro Membranes Food BASF Intermediates BASF Verbund Intermediates, March 30, 2017 ACY: Acetylene; MeOH: Methanol; FAH: Formaldehyde; BDO: 1,4-Butanediol; PBT: Polybutyleneterephthalat; THF: Tetrahydrofuran; GBL: gamma-butyrolactone; NVP: n-vinylpyrrolidone 21

22 Verbund case study PolyTHF Intermediates BASF downstream businesses End-user industries GBL NVP ACY BDO PBT Base resin & compounding MeOH BASF brands: Applications: FAH THF PolyTHF Ultradur Automotive Coatings PolyTHF Elastollan Adhesives & sealants Textiles Artificial leather BASF Intermediates BASF Verbund Intermediates, March 30, 2017 ACY: Acetylene; MeOH: Methanol; FAH: Formaldehyde; BDO: 1,4-Butanediol; PBT: Polybutyleneterephthalat; THF: Tetrahydrofuran; GBL: gamma-butyrolactone; NVP: n-vinylpyrrolidone 22

23 Verbund is more than pipelines Management & mindset 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 coproducts Joint quality management Cross-functional knowledge exchange Product development along value-chains Intermediates, March 30,

24 Agenda Intermediates at a glance Key technologies: Reppe and beyond Commodity business excellence How to manage the Verbund Summary Intermediates, March 30,

25 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,

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