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Last Update: 03/12/2009
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Supplementary report

BASF is pressing ahead with the optimization of its structures. The goal is an even stronger focus on its customer industries. At the same time, BASF is laying the foundation for the rapid and smooth integration of Ciba’s activities. In particular, BASF’s Performance Products segment is being developed further. The first organizational changes will take effect as of April 1, 2009.

Optimization of organizational structures

The Performance Products segment currently consists of the Acrylics & Dispersions, Care Chemicals and Performance Chemicals divisions. The new Paper Chemicals division will be assigned to the segment as of April 1, 2009. This division will initially consist of BASF’s paper chemicals and binders business as well as the kaolin minerals business, which are currently part of the Acrylics & Dispersions division. At a later time, Ciba’s business with products for paper manufacturing is to be integrated into the Paper Chemicals division.

The current Acrylics & Dispersions division will be renamed Dispersions & Pigments . This division will consist of BASF’s business with raw materials for the coating and paint industry. In addition, the dispersions business will be supplemented by the pigments and resins business, which is currently part of the Performance Chemicals division. The acrylic monomers business will be assigned to the Petrochemicals division, which will then encompass the key steps in the propylene value-adding chain. The superabsorbents business will be assigned to the Care Chemicals division. Later, the majority of business of Ciba’s Coating Effects segment will be integrated into the Dispersions & Pigments division.

In the Care Chemicals division, BASF is now combining, in addition to the human and animal nutrition units and pharmaceuticals business, all businesses the contribute to cleaning, personal care and hygiene. The assignment of the superabsorbents business to Care Chemicals will strengthen the division’s portfolio with 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. These, for example, include the plastics processing industry, automotive suppliers, refineries, users of oil fields and mining chemicals, as well as leather and textiles processers. Ciba’s plastics additives business, among others, will be assigned to this division.

For several years, the business with leather and textile chemicals 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. The business unit has therefore introduced an additional program to further optimize efficiency and reduce costs by €25 million by 2011. Besides implementing this package of measures, BASF is reviewing future strategic options. In particular, these include the formation of a joint venture or the complete sale of the business.

As of January 1, 2009, the styrene copolymers business was transferred from the Performance Polymers division to Styrenics. Styrenics does not belong to any segment, it is reported under “Other.”

BASF PRESSES AHEAD WITH THE OPTIMIZATION OF ITS STRUCTURES


  • Performance Products segment sharpens focus on customer industries
  • New Paper Chemicals division will be established
  • Preparations to integrate Ciba’s activities
  • BASF reviews strategic options for its leather and textile chemicals business

Segment structure and divisions of BASF (as of April 1, 2009)

Bond issue

In January 2009, BASF Finance Europe NV issued a bond with a nominal volume of €1.5 billion guaranteed by BASF SE. The coupon of the bond is 5.125% and it matures on June 9, 2015.

Change of credit ratings

At the beginning of 2009, Standard & Poor’s downgraded the rating of BASF to “A+/A-1/outlook negative” and Moody’s to “A1/P-1/outlook stable.”

BONDS ISSUED, LOWER CREDIT RATINGS


  • Long-term bond with a nominal volume of €1.5 billion and a coupon of 5.125% issued in January 2009
  • Credit ratings downgraded at the beginning of 2009: Standard & Poor’s to “A+/A-1/outlook negative,” Moody’s to “A1/P-1/outlook stable”

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