2007/12/6 BASF

BASF reorganizes its businesses: Faster to market, closer to customers, increased efficiency and greater cyclical resilience

• BASF to structure its businesses in six segments
• New segment Functional Solutions provides customer-specific system solutions with a focus on the automotive and construction industries
• New Care Chemicals division specializes on customers from the consumer goods and pharmaceutical industries
• Specialty Plastics and Foams business units to be transferred from Styrenics to Performance Polymers division
• Structures at the Ludwigshafen site improved further

BASF's new segment structure (Effective January 1, 2008)

BASF Aktiengesellschaft - The Chemical Company - is reorganizing its businesses. With effect from January 1, 2008, the company will consist of the following six segments: Chemicals, Plastics, Functional Solutions, Performance Products, Agricultural Solutions and Oil & Gas.

A new operating division, Care Chemicals, will be established in the Performance Products segment. In the Plastics segment, the Specialty Plastics and Foams business units will be transferred from the Styrenics division to the Performance Polymers division.

"We are focusing our businesses even more closely on our customers," said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft. "This will enable us to bring our products and system solutions faster to market and will create additional potential for value-adding growth. In addition, our investors will be better able to assess BASF because we are combining similar businesses in each of our segments."

Greater orientation toward customer industries

The new segment Functional Solutions will combine the operating divisions Catalysts, Construction Chemicals and Coatings. These divisions work closely with their customers and supply industry- and customer-specific system solutions and innovative products, in particular for the automotive and construction industries.

The Performance Products segment will consist of the new Care Chemicals division and the Acrylics & Dispersions (previously Functional Polymers) and Performance Chemicals divisions. As a result, BASF will be better able to supply its customers worldwide with the products and innovations they need to optimize their products and processes.

The new Care Chemicals division will combine the activities of the former Fine Chemicals division - for example, products for the pharmaceutical industry and for food and feed, as well as aroma chemicals - with the Performance Chemicals division's detergents and cleaners business. This will enable BASF to better serve the needs of its customers in the nutrition, cosmetics and personal care sectors of the consumer goods industry and in the pharmaceutical industry. The new division will employ approximately 4,600 employees worldwide and will be headed by Gabriel Tanbourgi. The division's annual sales are approximately Euro3 billion.

The Performance Chemicals division provides solutions that can be used to optimize industrial goods. These solutions include performance chemicals for the oil and refinery industries, for coatings and plastics and for the leather and textile industries. The Performance Chemicals division will have around 5,000 employees worldwide and will be headed by Hans W. Reiners. The division's annual sales are approximately ?2 billion.

In the Plastics segment, the Specialty Plastics and Foams business units will be transferred from the Styrenics division to the Performance Polymers division. This structure reflects on the one hand the planned divestiture of the business with standard styrenics. On the other hand, by combining its competence in specialty plastics and foams with its businesses in the Performance Polymers division, BASF is also able to offer its customers optimal solutions for their requirements. The Performance Polymers division will account for approximately 5,000 employees worldwide. The division's annual sales are approximately Euro5 billion.

Structures at the Ludwigshafen site further improved

The structures at BASF's main site in Ludwigshafen will be further improved by building on the successes of the Site Project. The goal is to strengthen the network of knowledge and expertise among employees and to encourage the exchange of information about the environment, health, safety, energy and engineering throughout BASF. The global roles of the Environment, Health & Safety and Engineering & Maintenance competence centers will be strengthened in order to achieve this.

2008/1/9 BASF

BASF expands plasticizers business in Asia Pacific

・Oxo-C4 production capacity in Nanjing to be expanded to 305,000 metric tons
・Plasticizer applications laboratory inaugurated in Shanghai
・Focus on innovative products Hexamoll(R) DINCH and Palatinol(R) 10-P

BASF today (January 9, 2008) outlined several key initiatives for its Asia Pacific plasticizers business. To meet growing demand for solvents and plasticizers the company plans to expand the annual production capacity of its oxo-C4 plant in Nanjing, China, by 55,000 metric tons to 305,000 metric tons by the fourth quarter of 2008. This move will ensure reliable supplies of the precursor alcohols n-butanol and 2-ethylhexanol. In Asia, and in China especially, demand for plasticizers is expected to grow by 4 to 5 percent per year through to 2015.

At the same time, BASF inaugurated the region's first plasticizer applications laboratory in Shanghai. The new laboratory's research and development efforts will focus on flexible PVC applications for innovative products such as BASF's Hexamoll DINCH, a non-phthalate plasticizer specially designed for sensitive applications for use in food contact and medical devices, and the recently introduced Palatinol 10-P, a new C10 plasticizer with a superior performance in the area of automotive and wire and cable applications. A team of technical experts will provide specialized services ranging from trials, tests and on-site technical advice to formulation adjustments and joint development with customers.

“This is a sign of the times ? China in particular and Asia Pacific in general are the markets of today and the future for chemicals,” said Johnny Kwan, Chairman of the BASF Greater China Country Board. “Our state-of-the-art laboratory will provide our customers in the region with the innovations they need to be successful.”

“Debottlenecking the oxo-C4 plant prior to the launch of our expansion plans for our other facilities at the Nanjing site is crucial for our customers,” said Dr. Albert Heuser, President of BASF's Petrochemicals division. “We will be able to meet rapidly growing demand in Asia, particularly in China, which accounts for about half of the demand for oxo-alcohols in the region. With the introduction of a technical service center in Shanghai and the expansion of our production capacity in Nanjing as well as that of our established facilities in Europe and the United States, BASF is strengthening its position as a leading global player in the field of plasticizers and plasticizer alcohols.”

Plasticizers provide flexibility to normally rigid and brittle PVC, thereby opening up a large number of applications in consumer goods. Plasticizers are essential in the production of numerous everyday products including flooring, cable insulation, toys and cling film. BASF is one of the world's leading producers of plasticizers with a production capacity of more than 500,000 tons per year. It offers its customers the widest range of standard and specialty products to meet their individual requirements.

2008/5/27　BASF

BASF Plant Science and Academia Sinica (Taipei) to cooperate on gene discovery

• Focus on yield increase and stress tolerance in crops such as rice and corn
  
• Third plant biotech agreement by BASF Plant Science in Asia within eight months

BASF Plant Science and Academia Sinica 台湾中央研究院, the leading research institute in Taiwan, today signed a cooperation agreement. Focus is on the discovery of genes that increase yield and improve stress tolerance in major crops such as rice and corn. Financial details have not been disclosed.

Within the scope of the cooperation, Academia Sinica will continue their work on the detailed functional analysis of genes in rice. BASF will evaluate genetically modified rice plants and further develop the most promising genes in rice as well as other crops. Target is to market several genetically enhanced crops with improved yield. The duration of the cooperation has initially been set for two years.

“We are impressed by the broad expertise that our partner brings to the coopera-tion,” said Dr. Jürgen Logemann, Vice President Technology Management, BASF Plant Science. “BASF was able to select those genes from preliminary studies at Academica Sinica that show the largest potential to increase and secure yield in crops.”

“We are delighted to partner with BASF Plant Science for identification of rice genes that control stress tolerance and beneficial agronomic traits through study of our gene library and database called TRIM,” said Dr. Su-May Yu of the Institute of Molecular Biology at Academia Sinica, who heads the project. TRIM stands for Taiwan Rice Insertional Mutant library and database.
“Essential genes identified during the cooperation could be used to improve yield in rice and other cereal crops such as wheat, corn, and grass species, which are very much needed in order to ensure food and bioenergy security for the rapidly growing world population,” Dr. Yu added.

After agreements with CFGC (South Korea) and NIBS (Beijing), the agreement with Academia Sinica is the third cooperation agreement that BASF Plant Sci-ence has entered within the past eight months. “BASF Plant Science highly values the quality of work carried out by research institutes in Asia-Pacific,” said Logemann.

January 24, 2008 BASF

BASF Plant Science and National Institute of Biological Sciences, Beijing enter cooperation and license agreement

・ BASF Plant Science intensifies biotech cooperation activities in Asia Pacific
・ Research focuses on higher yield in major crops such as corn (maize), soybeans and rice

BASF Plant Science and the National Institute of Biological Sciences, Beijing (NIBS) 北京生命科学研究所 today announced a cooperation and licensing agreement in biotechnology. It is the first cooperation to be made by BASF Plant Science in the People's Republic of China and focuses on increasing yield in staple crops such as corn, soybeans and rice.
“Asia is emerging as a key player in plant biotechnology both in research and cultivation and we are striving to intensify partnerships in this dynamic region. Europe, on the contrary, is losing its competitiveness due to slow and contradictory political decisions,” said Dr. Hans Kast, President and CEO of BASF Plant Science. In October 2007, BASF Plant Science announced another cooperation agreement with the South Korean Crop Functional Genomics Center, CFGC.
“NIBS was established in 2003 to advance the frontier of basic research in life sciences in China,” explained Professor Deng Xing Wang, plant biologist and one of two co-directors at NIBS. “We are very proud that our efforts in this area have lead to groundbreaking results in a little more than four years.”
NIBS has identified a family of genes that have shown to increase crop yield. Under the agreement, the institute will further analyze the detailed functions of the identified genes before they enter BASF Plant Science's strong yield R&D pipeline.
“Discoveries in yield increase like those made by NIBS will help meet booming worldwide demand for food and feed,” Kast and Deng agreed. Increasing yield in staple crops is a key target of modern agricultural research. In countries such as China, rising standards of living have caused meat consumption to increase by 300 percent in the past 20 years and the demand for animal feed has risen accordingly.
At the same time, factors such as urbanization are reducing the amount of arable land in Asia.
Under the agreement, BASF Plant Science obtains exclusive rights to develop and commercialize transgenic crops with the discovered genes outside China. NIBS retains the right to market crops in China.
Financial details of the agreement have not been disclosed.

About the National Institute of Biological Sciences, Beijing
The National Institute of Biological Sciences, Beijing (NIBS, Beijing) was established to advance the frontier of basic research in the life sciences in China. Founded in 2003 as part of a strategic government initiative to further national development of science and technology, NIBS aims to become a first rate, internationally competitive research institution. Its faculty will educate future generations of life scientists and explore a new model for operating scientific institutions in China. NIBS currently has six plant biology laboratories with focus on research in the mechanisms of plant development and how plants respond to internal and environmental signals. Many of their research discoveries have direct implications to agribiotechnology and improvement of crops.

2007/10/4 BASF

BASF Plant Science and Crop Functional Genomics Center sign R&D agreement in South Korea

Jul 30, 2008 Reuters

BASF looking at takeover targets

German chemical group BASF is considering taking over U.S. rival W. R. Grace & Co, the Financial Times Deutschland said on Wednesday, citing middle management and banking sources.

As well as assessing Grace, which has $3.1 billion in annual turnover, BASF will also be looking closely at the strategy, company structure and business development of U.S. group Rockwood and Germany's Cognis COGN.UL with a view to acquisitions, the paper said.

All three potential targets have been given project names, a sign that they are being considered seriously for takeover, the report said.

BASF Chief Executive Juergen Hambrecht said this month that consolidation in the sector will accelerate, driven by cost pressures, lower asset prices and financial investor problems.

Earlier this month, rival Dow Chemical said it would acquire specialty chemical maker Rohm and Haas Co for $15.3 billion to tap higher-margin markets such as paints, coatings and electronic materials.

A BASF spokesman said on Wednesday that the company would not comment on the newspaper report or individual companies. He said, however, that BASF continues to look at potential investments as part of its strategy.

BASF, which enjoys the highest credit rating among European chemicals, has said it could buy any company that fits its terms. It had said it could spend up to 10 billion euros ($16 billion) on acquisitions.

The German group is in the process of selling its styrenics operation with annual sales of around 3.2 billion euros.

BASF has trimmed highly cyclical businesses. It spent about 7 billion euros in 2006 to buy U.S. catalyst maker Engelhard, the construction chemicals business of Degussa and U.S. resin maker Johnson Polymer.

W. R. Grace & Co

Grace is a premier specialty chemicals and materials company.

First Choice for Packaging Assurance
Grace Materials and Packaging Technologies provides sealants, coatings and closures to the food and beverage industries that are used in more than 300 billion containers each year.

Worldwide Leader in Construction Products
For more than 50 years, Grace Construction Products has offered commercial and residential construction products used in projects ranging from major infrastructure to minor home repair.

Global Specialty Chemical Supplier
Grace Davison is the second longest continually operating chemical company in the United States, offering discovery sciences, engineered materials, packaging technologies, catalysts and refining technologies.

We help biorefineries manufacture alternatives to gasoline and diesel that promote clean energy sources.

グレースケミカルズは米国コンクリート混和剤の最大手メーカーであるW.R.グレースの実績とセメント・特殊混和材メーカーの電気化学工業�鰍ﾌ開発を結び、多様化するニーズに対応しております。

Rockwood

Rockwood Holdings, Inc. is a world-class specialty chemicals and advanced materials company committed to delivering exceptional value through continued leadership in customer service, quality, on-time delivery and innovative technology and is currently composed of 15 individual business units.

2007 net sales by end-use market
　Chemicals and Plastics 13%
　Life Science 8%
　Electronics and Telecommunications 11%
　Consumer Products 4%
　Metal Treatment ang General Industrial 16%
　Paper 3%
　Construction 14%
　Specialty Coatings 7%
　Automotive 14%
　Environmental 2%
　Others 8%

Cognis COGN.UL
ドイツ･モンハイムに本社を置き、世界30カ国に拠点を持ちます。　油脂化学をバックボーンに、160年に及ぶ経験と実績を有する、世界的な総合化学会社です。

自然由来の機能性食品、栄養補助食品素材など健康の向上を目的とする製品、低刺激な化粧品や洗剤、そして塗料・インクなどの原料、が私たちの製品群です。

Cognis is a leading specialty chemicals company with activities around the world. Utilizing its 160 years of experience in oleochemicals, Cognis markets innovative products and solutions for personal care, home care and modern nutrition, as well as high-performance products for numerous industrial markets.

Care Chemicals	Nutrition & Health	Functional Products	PulcraChemicals	Cognis Oleochemicals
・Hair / Body / Oral Care ・Home Care ・Industrial & Institutional 　Cleaning ・Skin Care ・Silicates	・Dietary Supplements ・Pharmaceuticals & Healthcare ・Food Technology ・Functional Food & 　Medicamental Nutrition	・Adhesives ・Consumer Coatings ・Emulsion 　Polimerization ・Graphic Arts ・Industrial Coatings ・Polymer 　Building Blocks ・Synlubes Technology ・AgroSolutions ・Mining Chemicals ・Ion-Transfer Technology	・Textile Technology ・Fiber Technology ・Leather Technology	・Fatty Acids ・Glycerin / Triacetin ・Ozon Acids ・Plastic Additives ・Oilfield Chemicals

　

2008/8/18 BASF

BASF takes a further step in the divestment of its styrenic activities

• Styrenic copolymer business to be added to the divestment process
• Styrenics business to be reorganized in new BASF Group companies

BASF is continuing the divestment process of its global styrenic business and plans to reorganize the business into new subsidiaries as appropriate. The new companies are expected to be established in January 2009.

In addition, the scope of the activities to be sold will be expanded to include the styrene copolymer business. This expansion includes styrenic copolymer production plants in Ludwigshafen and Schwarzheide, Germany as well as the styrene copolymer global marketing, sales and logistics activities.

The new subsidiaries will operate the global styrenics business independently. They will combine the commodities styrene monomers (SM), polystyrene (PS), styrene butadiene copolymer (SBS) and acrylonitrile butadiene styrene (ABS) as well as the styrene copolymers consisting of the Luran® (SAN), Luran® HH (AMSAN), Luran® S (ASA), Terblend® N (ABS/PA), Terluran® HH (ABS-HH), Terlux® (MABS) and Styroflex® (SBS) brands. The styrenic commodities and copolymers with around 1,600 employees had total sales of about Euro 4 billion in 2007 and production sites located in Antwerp, Belgium; Ludwigshafen and Schwarzheide, Germany; Altamira, Mexico; São José dos Campos, Brazil; Dahej, India; and Ulsan, South Korea. BASF will concentrate its remaining styrenic plastics activities on its foams business for the construction and packaging industries as part of the Performance Polymers division.

“We are reorganizing our styrenics business to improve its future success and give us new options outside of BASF,” said Dr. Martin Brudermüller, member of the Board of Executive Directors of BASF SE and responsible for the Plastics segment.

Styrene commodities are mainly used for household and office equipment, information technology, as well as cosmetics and in packaging. Styrene is a colorless liquid and is the basis for these plastics. Styrenic copolymers are thermoplastics on the basis of the monomers styrene and acrylonitrile. They are highly resistant to chemicals and temperature which makes them versatile materials for use in the automotive and electronic industries as well as in many everyday products.

2008/9/15 BASF

BASF makes offer to acquire Ciba

* Cash offer of CHF 50.00 per share provides attractive premium
* Ciba's Board of Directors supports offer
* BASF to expand its leading position in specialty chemicals with additional products and services
* Repositioning and restructuring of paper chemicals operations to create leading supplier with extensive portfolio
* Basel to remain an important site for parts of the combined business
* Conference call at 9:00 a.m. CEST, press conference in Zurich at 11:00 a.m.

BASF plans to acquire Ciba Holding AG, Basel, Switzerland, a leading specialty chemical company, and will make a public takeover offer to Ciba's shareholders. BASF will pay CHF 50.00 in cash for each nominal share in Ciba. BASF and Ciba have reached a transaction agreement in which the Board of Directors of Ciba supports BASF's attractive offer and recommends its acceptance to Ciba's shareholders. The offer corresponds to a premium of 32 percent above the closing price for Ciba's shares on September 12, 2008 and a premium of 60 percent above the volume-weighted average share price for Ciba shares in the 30 days prior to announcement of the public takeover offer. Based on all outstanding Ciba shares and including all net financial liabilities and pension obligations, the enterprise value would be CHF 6.1 billion (approximately Euro 3.8 billion).

Convincing strategic logic
“With the acquisition of Ciba, we are strengthening our portfolio and expanding our leading position in specialty chemicals with products and services for a variety of customer industries, in particular the plastics and coatings industries as well as water treatment. In paper chemicals, we will intensify the urgently needed restructuring process and become the leading supplier with an extensive portfolio. We will grow profitably in accordance with our clear and successful strategy. The transaction meets our acquisition criteria. We expect that it will make a positive contribution to earnings per share in the second year,” said Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE. “Our attractive cash offer gives Ciba shareholders the opportunity to realize the full value of their investment plus a high premium immediately,” he added.

“We recognize the strength of broad areas of Ciba's portfolio, even if the company's performance has disappointed analysts and investors, especially in the second quarter of 2008. Ciba has a leading market position, in particular with its portfolio of plastics additives and coating effect materials, and offers its customers significant benefits,“ continued Hambrecht. “The integration of Ciba's activities into BASF and the necessary further restructuring measures will give the businesses sustainable strength and offer them a long-term perspective for profitable growth. The precondition for this is to rigorously improve operational excellence.“

Hambrecht stressed: “We look forward to working with Ciba's highly committed executives and employees. We offer the company and its employees a new home with a long-term, viable perspective. Basel will remain an important site for parts of the combined business, in particular research, and we will establish a global operating division there. We are convinced that there is a good match between the cultures and traditions of our two companies. BASF plus Ciba is a recipe for both consolidation and profitable growth.”

“Against the backdrop of increasingly challenging conditions within our industry, this is a transaction which combines a fair price with an industrially compelling solution for Ciba,” said Dr. Armin Meyer, Chairman of the Board of Directors of Ciba. “Ciba's businesses will be strengthened substantially thanks to integration into BASF's Verbund and the access to BASF's research, production and marketing platform. This applies particularly in the Plastics, Coatings and Paper divisions. BASF is a long-standing customer and supplier of Ciba and well-acquainted with our people and our business. The acquisition of Ciba by BASF will provide a long-term perspective for profitable growth of the Basel operations in particular and our other businesses around the world.”
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Clear advantages in global competition
“In the current consolidation phase in the chemical industry, the acquisition of Ciba offers clear advantages in terms of global competition,” said Hambrecht.

The merger of the activities of BASF and Ciba would extend BASF's leading position as a preferred supplier to the plastics industry and make BASF the second-largest supplier of coating effect materials. In the fast-growing and highly profitable market for plastics additives, BASF would expand its portfolio by gaining important product segments such as UV stabilizers and antioxidants. In the area of coating effect materials, the combination of BASF and Ciba would offer an extensive range of pigments, resins and additives.

Thanks to economies of scale and greater efficiency, the resulting leading supplier of chemicals for the paper industry would offer the broadest product portfolio in the industry and with its global reach would provide customers with the best range of products and services in a difficult market environment. Extensive restructuring is necessary throughout the entire paper value chain. By combining and repositioning the paper chemicals businesses of BASF and Ciba, BASF would start this urgently needed process with the aim of ensuring the long-term profitability of these activities.

Stronger growth in the markets of the future
In addition, the planned acquisition would strengthen BASF's presence in fast-growing emerging countries and improve its market position in important industries such as automotive, packaging, construction, electronics and water purification. Thanks to the integration in BASF's Verbund, Ciba's businesses for attractive niche markets such as oil and mining would benefit from wider market access and BASF's extensive application and product know-how. This would open up additional growth opportunities. The two companies also complement each other very well with regard to research and development. Combining the specific application know-how of Ciba with BASF's strong R&D platform would make it possible to provide customers worldwide even faster with better products and solutions.

Offer period expected to begin on October 1, 2008
BASF will today (September 15, 2008) publish the formal advance notification in which the offer is officially announced and which contains all the fundamental information on the planned offer. The offer prospectus is scheduled to be published on October 1, 2008. The offer is expected to begin with the publication of the offer prospectus following the approval of the offer by the Swiss Takeover Board and, subject to later extension, will be valid for 20 trading days plus an obligatory extension of 10 trading days in accordance with Swiss law. The offer is subject to a number of conditions. These include the tendering of at least 66.67 percent of all nominal shares, approval by the relevant authorities, as well as the removal of various takeover defenses in Ciba's statutes. BASF expects to finalize the transaction in the first quarter of 2009 at the latest. The financing for the offer is in place.
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Selected key data for BASF and Ciba (2007)
BASF
Sites: ~100 major sites
Employees: ~95,000
Sales: Euro 57.9 billion
EBIT before special items: Euro 7,614 million
EBITDA margin: 18.2 percent*

Ciba
Sites: ~60
Employees: ~13,000
Sales: Euro 4.0 billion
EBIT before special items: Euro 336 million
EBITDA margin: 13.9 percent*

* before special items

2008/11/19 BASF　

BASF reduces production worldwide
　* Massive decline in demand in key industries
　* Previous year's earnings level will not be achieved

BASF is taking measures to avoid the creation of overcapacities as a result of a massive decline in demand. The company is temporarily shutting down around 80 plants worldwide. In addition, BASF is reducing production at approximately 100 plants. This was already announced for polystyrene and caprolactam. Scheduled maintenance work is being brought forward.

“We already drew attention to the difficult economic situation at the end of October. Since then, customer demand in key markets has declined significantly,” said Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE. “In particular, customers in the automotive industry have canceled orders at short notice.”

In addition, sales volumes are being negatively impacted by increased reduction of inventory by customers and a lack of credit in customer industries.

“In 2008, BASF will therefore not achieve the previous year's excellent EBIT before special items. How the coming year will develop is difficult to foresee. BASF is preparing for tough times,” said Hambrecht.

Worldwide, approximately 20,000 employees will be affected by the production cuts. Flexible working time arrangements will be used wherever possible.

At the company's main site in Ludwigshafen, Germany, BASF SE has signed an agreement with the works council under which the measures will be implemented through the flexible use of working time arrangements such as overtime and vacation. According to current plans, the measures are expected to affect approximately 5,000 employees in Ludwigshafen.

“We are responding flexibly to market developments and are acting quickly,” explained Hambrecht. “BASF will now focus even more closely on cost and budget discipline, and will use opportunities arising from the crisis. We will also proceed swiftly with the planned acquisition and integration of Ciba to further optimize our business.”

The adjustments are primarily being carried out in units that supply the automotive, construction and textile industries. Value chains affected include ammonia, styrene and polyamide, which manufacture precursors for engineering plastics, coatings and fibers. The shutdowns will be coordinated throughout BASF's global production Verbund and will involve all six Verbund sites in Europe, Asia and North America, as well as other sites. Implementation of most of the measures has already started; reduced capacities are expected to last until January 2009 for individual plants. Should the period of weak demand continue and if all other flexible working time models have been exhausted, the company cannot rule out the need for short-time working at individual sites worldwide.

BASF will continue to follow market developments very closely and will adjust production planning accordingly. “We are realistic, but we are nevertheless confident when we look to the future,” said Hambrecht. “We have made BASF more resilient in the past years. The strength of our better balanced portfolio makes itself apparent in the current difficult situation. We are solidly financed, and we have the best team on board to navigate the route ahead successfully.”

2009/1/15 BASF

BASF to change PolyTHF feedstock supply in Korea
* Shutdown of local BDO and THF production
* Local PolyTHF production will continue to operate
* Supply of BDO and THF to customers will continue via global network

BASF plans to permanently close its production facility for 1,4-butanediol (BDO) and tetrahydrofuran (THF) in Ulsan, which has been temporarily shut down since August 2008, and the company will continue to supply related customers via its global network. BASF's PolyTHF plant in Ulsan will continue to operate with feedstock from the network accordingly.

“BASF Korea will work closely with local labor representatives to minimize the impact of the shutdown,” said Dr. Peter Schuhmacher, responsible for the Asia-Pacific business of BASF's Intermediates operating division. 27 people work at the affected plant and BASF has started to communicate with labor unions already. BASF currently employs 940 people in Korea.

BASF will continue to maintain a reliable supply of BDO and THF to its PolyTHF plant at Ulsan from BASF's global network, including the company's THF plant in Caojing, China, which is operating with a new BASF-owned technology. Dr. Schuhmacher emphasized, ”The announced move strengthens our global leadership position in PolyTHF. We now supply BDO and THF to Ulsan from BASF plants with access to more economic feedstock sources.”

Using THF as a major feedstock the Ulsan PolyTHF plant provides standard PolyTHF grades for high quality spandex fibers. The plant, inaugurated in 1998, is also a production hub for specialty PolyTHF grades for adhesives, coatings, and thermoplastic elastomers.

BASF produces THF at its plants in Ludwigshafen (Germany), Geismar (USA), Caojing (China) and Kuantan (Malaysia). With BDO produced at these plants and at BASF's Chiba (Japan) site, the total global capacity for BDO equivalents amounts to 535.000 metric tons per year. In addition to Ulsan, BASF produces PolyTHF in Ludwigshafen, Geismar and Caojing with an annual capacity of 185.000 metric tons.

BASF Korea is a wholly owned subsidiary of BASF, currently employing 940 employees at six production sites and at its Seoul office. BASF Korea maintains three production sites in Ulsan, and one each in Yeosu, Gunsan and Ansan, under four BASF units: Styrenics, Polyurethanes, Performance Chemicals, and Specialty chemicals.

2009-02-04 BASF

BASF takes steps to optimize its structures

*Performance Products segment sharpens focus on customer industries
*New operating division Paper Chemicals established
*Preparations to integrate Ciba businesses
*BASF reviews strategic options for its leather and textile chemicals business

BASF is taking steps to optimize its structures in order to sharpen the company’s focus on its customer industries. At the same time, BASF is laying the foundation for the rapid and efficient integration of Ciba’s businesses. In particular, BASF’s Performance Products segment is being developed further. The initial organizational changes will be effective as of April 1, 2009.

BASF expects the approvals of the relevant antitrust authorities and the closing of the Ciba transaction toward the end of the first quarter of 2009. The so-called “Discovery Phase” will begin immediately after closing. During this phase, which is expected to last about two months, joint teams consisting of BASF and Ciba employees will analyze the acquired businesses in depth. The goal of the analysis is to define a market-oriented positioning for the combined businesses as well as the optimal organizational structure. The actual integration process is then expected to start in the second half of 2009 on the basis of these results.

Dr. John Feldmann, member of the Board of Executive Directors responsible for the Performance Products segment, explained the benefits of the changes: “With these initial steps, we are very clearly focusing our business on the needs of our customers and markets and sharpening the profile of the segment’s divisions. At the same time, we are creating the conditions that we need to integrate the new Ciba businesses rapidly and efficiently in the next step. After closing, we will develop the detailed organization for the combined businesses with our new divisions together with colleagues from Ciba.”

Details of the organizational changes as of April 1, 2009 are as follows:

BASF's new segment structure (Effective January 1, 2008)

The Performance Products segment currently consists of the Acrylics & Dispersions, Care Chemicals and Performance Chemicals divisions. As of April 1, 2009, the new division Paper Chemicals will also form part of the segment. This division will initially consist of BASF’s business with paper chemicals business, binders and kaolin minerals, which is currently part of the Acrylics & Dispersions division. The head of the new division will be Dr. Ehrenfried (Fred) Baumgartner (56), who is currently responsible for BASF’s Inorganics division. Following the completion of the Discovery Phase, Ciba’s business with products for paper manufacturing will be integrated into the new division.

The current Acrylics & Dispersions division will be renamed Dispersions & Pigments. This division will bundle BASF’s business with raw materials for the coating and paint industry. As a result, the existing dispersions business will be complemented by the pigments and coatings resins business that is currently part of the Performance Chemicals division. The acrylics business will be reassigned to the Petrochemicals division, which will then encompass the key steps in the propylene value chain. The superabsorbents business will be assigned to the Care Chemicals division. The majority of Ciba’s Coating Effects business will be integrated into the Dispersions & Pigments division after the Discovery Phase.

In the Care Chemicals division, BASF is now combining all businesses that contribute to cleaning, personal care and hygiene in addition to human and animal nutrition as well as pharma. The assignment of the superabsorbents business to Care Chemicals will strengthen the division’s portfolio with additional consumer-related products for personal care.

In the future, the Performance Chemicals division will primarily offer innovative and specific solutions for a broad range of industries including plastics processing, automotive, refineries, oil fields and mining, as well as leather and textiles. Ciba’s plastics additives business, among others, will be assigned to this division after the Discovery Phase.

BASF reviews strategic options for leather and textile chemicals
The leather and textile chemicals business also forms part of the activities of the current Performance Chemicals division. For several years, this business has been characterized by low market growth and high competitive pressure. In order to improve competitiveness, BASF has implemented a series of restructuring and efficiency programs in the past years. However, these measures have not been sufficient to ensure the long-term profitability of the business.

Hans W. Reiners, head of the Performance Chemicals division, said: “Our employees have worked hard to improve the business in recent years. In view of the difficult market situation, the results are not sufficient to ensure long-term success with our own means.” The business unit has therefore introduced an additional program to increase efficiency, which is expected to reduce costs by Euro 25 million by 2011.

In addition to implementing this cost-reduction program, BASF is reviewing future strategic options. In particular, these include the formation of a joint venture or the complete sale of the business. “The market requires this step not just because of the fragmented supplier structure and the low market growth,” said Reiners.

BASF operates production plants for leather and textile chemicals in Germany, Spain and Turkey, as well as in Brazil, India and China. The business, which employs approximately 1,300 people, posted global sales of about Euro 400 million in 2007. Leather and textile chemicals include products and concepts for weaving, pretreatment, optical brightening, analog and digital printing, coating and finishing, as well as dyeing auxiliaries in addition to chemicals for all wet-end and finishing processes in the leather and fur industries.

2009-07-06

BASF specifies restructuring plans

*23 of 55 acquired production sites worldwide under review
*Synergies of at least Euro400 million per year expected
*Fair and transparent decisions

BASF has finalized its plans for the integration of Ciba Holding AG, which it acquired in April 2009. Under the plans, former Ciba businesses are to be integrated into the operating divisions in BASF’s Performance Products segment where their potential can best be realized and developed. The integration will involve extensive restructuring measures that BASF expects to generate synergies of at least Euro400 million per year from 2012 onward. By the end of 2010, savings of approximatelyEuro300 million are to be achieved. At the same time, the integration process is expected to entail cash costs totaling approximately Euro550 million, about Euro150 million thereof in 2009. BASF will report details of non-cash integration costs as part of its second-quarter interim reporting on July 30, 2009.

The restructuring plans include a reduction of approximately 3,700 positions by 2013, the majority of which will be eliminated by the end of 2010. BASF is reviewing strategic options - including restructuring, sale or closure - for 23 of the 55 former Ciba production sites worldwide. Decisions will be made about these sites by the end of the first quarter of 2010. The remaining 32 production sites are to be optimized as part of BASF’s global production network or restructured. By the end of 2010, BASF also aims to consolidate 36 of the former Ciba’s 70 sales and administrative offices and research sites with existing BASF activities.

As already announced, the company will retain a strong presence in the Basel region. BASF’s new Paper Chemicals division, formed in April, and the two associated business units Coatings & Starch Europe and Wet End Chemicals have been based in Basel since July 1, 2009. In addition, the European business unit for plastic additives and the global units for technology management and the restructuring of the pigments business have been relocated to the former headquarters of Ciba Holding AG in Basel. BASF is also establishing a new Business Center Switzerland in Basel that will function as a service platform for sales, finance, human resources and other activities in Switzerland. A BASF research center will be based in Basel as well.

BASF aims to implement restructuring measures in a socially responsible manner and has begun talks with local employee representatives. “This is unfortunately not good news for some of our employees,” said BASF Chairman Dr. Jurgen Hambrecht. “But the combined businesses can be successful in the long term only if we optimize them and exploit the full potential for synergies. I promise all our employees that we will keep the period of uncertainty as short as possible and will make decisions in a fair and transparent way.”

Key elements of the integration are:
*Ciba’s and BASF’s paper businesses will be bundled and restructured within the newly formed Paper Chemicals division. BASF will become a world leader with a comprehensive portfolio in a market that is currently undergoing major structural transformation.

*All Ciba’s coatings effects activities are to be integrated into BASF’s Dispersions & Pigments division, which is organized in regional business units. BASF will become the world’s second-largest provider of raw materials for the coatings and paints industry.

*Ciba’s plastic additives business will be integrated into the Performance Chemicals division. This will extend BASF’s portfolio to cover important product segments such as UV stabilizers and antioxidants, making BASF the world leader in plastic additives.

*The majority of Ciba’s water treatment business will be integrated into the Performance Chemicals division. A strategy for the water treatment business will be developed by 2010.

*Ciba’s Home & Personal Care business will be integrated into the existing structure of the Care Chemicals division.