BASF s Contribution to Sustainability in the Textile Value Chain

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1 BASF s Contribution to Sustainability in the Textile Value Chain James Carnahan, Textile Chemicals, BASF Guangzhou, 8 th November,

2 Performance Chemicals Agenda BASF Who we are and what we do Vision 2050 One Planet Scenario Measuring Sustainability BASF Putting FUTURE into Textiles 2

3 Performance Chemicals BASF The Chemical Company Our chemicals are used in almost all industries We combine economic success, social responsibility and environmental protection Sales 2012: 72,129 million Expenditures for R&D circa 1.7 billion world leader in chemical industry Employees (as of December 31, 2012): 110,782 Around 10,500 employees worldwide involved in research and development In 2012, BASF filed for around 1,170 new patents worldwide BASF - Our Purpose We create chemistry for a sustainable future

4 Performance Chemicals BASF Worldwide Sites Antwerp Florham Park Ludwigshafen Freeport Geismar Nanjing Hong Kong Kuantan Singapore Regional centers Selected production sites São Paulo Verbund sites Most important research sites

5 Performance Chemicals BASF Segments as of January 1, 2013 Chemicals Performance Products Functional Materials & Materials & Solutions Solutions Agricultural Solutions Oil & Gas Petrochemicals Monomers Intermediates Dispersions & Pigments Care Chemicals Nutrition & Health Paper Chemicals Catalysts Construction Chemicals Coatings Performance Materials Crop Protection Oil & Gas Performance Chemicals Segments involved in the textile value chain 5

6 Performance Chemicals Agenda BASF Who we are and what we do Vision 2050 One Planet Scenario Measuring Sustainability BASF Putting FUTURE into Textiles 6

7 Scenario Modelling Vision 2050: the new agenda for business BASF conducts in-depth analysis with Accenture: prove the relevancy of sustainable development for BASF identify key levers to help address the challenges Innovation required to deliver solution 2-3 times more resource efficient than business as usual 7

8 Performance Chemicals Four Levers for reaching One Planet Ecological footprint 2050 Energy is the main lever for reaching One Planet Clean energy generation Energy efficiency 2,8 Earths No Improvements 1,0 Earths One Planet Food Yields Diet Water & non-renewable resources are critical to achieve Base of the Pyramid markets require to be developed For the Textile industry, energy, water and non-renewable resources are most relevant Source: Accenture and Global Footprint Network Page 8

9 Performance Chemicals Agenda BASF Who we are and what we do Vision 2050 One Planet Scenario Measuring Sustainability BASF Putting FUTURE into Textiles 9

10 Sustainability integrated into our Business Decisions Enable our customers to develop more sustainable solutions Creating value Connect in our team and with society Deliver excellence in our operations Reducing risk

11 Performance Chemicals Overview of our 2020 goals 2020 Target 2012 Energy & Climate Protection Greenhouse gases - 40% % Energy efficiency + 35% % Halt flaring of associated gas -100% Achieved Water Drinking water for production - 50% % Sustainable water management 100% 3.1% Emissions to water Organic substances - 80% % Nitrogen - 80% % Heavy metals - 60% % Emissions to air Air pollutants - 70% % 11

12 We Help our Customers to Reduce their Carbon Footprint CO 2 e* emissions at customers million metric tons of CO 2 e/year Without the use of BASF products: 1772 With use of BASF products: 1452 Emissions avoided: 320 million metric tons CO 2 e/year Goal: Continuously increase the contribution towards emission avoidance made by BASF products. * Carbon dioxide equivalent

13 Sustainability Measurement Creating Value for our customers BASF Eco-Efficiency Analysis Views and compares both economic and environmental advantages and disadvantages of products and processes Considers entire life cycle product/process More than 500 analyses completed High eco-efficiency means: greatest benefit to customers in terms of costs and environmental impact 13

14 Sustainability networks Examples of BASF s memberships Multistakeholder initiatives Business initiatives Voluntary initiatives of the chemical industry 14

15 Performance Chemicals Agenda BASF Who we are and what we do Vision 2050 One Planet Scenario Measuring Sustainability BASF Putting FUTURE into Textiles 15

16 Putting FUTURE into Textiles Textile Industry: Sustainability Drivers Economic Increase in diversity of consumers require affordable fashion to function Textile manufacture with reduction/optimized costs without compromising performance Environmental A greater awareness for health and the environment Increased demand for products perceived to be more natural and having a more positive environmental impact but affordable whilst reducing the environmental footprint of how we live and being mindful of resource constraints Brand owners and retailers target stronger sales and earnings and position themselves as more sustainable by defining sustainability strategies and corresponding goals NGO s and legislation increase environmental pressures 16

17 Putting FUTURE into Textiles Sustainability Development & Integration In Textiles, our contribution to sustainable development is clustered in 3 pillars Product Safety Resource Saving Environment Protection BASF is committed to drive sustainability forward: Systematic portfolio screening & evolution Imposition of internal ecological standards Toxicological Eco-toxicological R&D targets must include sustainability improvements Stringent product stewardship 17

18 Putting FUTURE into Textiles Supporting the Textile Value Chain Through: Brand RSL s certification Environmental certification for customers Advisory committees for value chain associations/coalitions Input stream management system 18

19 Delivering Solutions Low temperature cotton bleaching 19

20 Low Temperature Cotton Bleaching Prestogen Activator LTB Developed to allow a controlled rate of reaction at significantly lower temperatures. This gives the following customer benefits: Increased fiber strength Better stretch & recovery properties of fabrics incorporating elastane/spandex fibers Softer, fuller fabric handle Reductions in energy Reductions in recipe chemicals: no stabiliser necessary reduced amounts of caustic soda When incorporated with the BASF package: a significant reduction in water a significant reduction in time 20

21 Delivering Solutions Low temperature cotton bleaching Non-iron zero add formaldehyde resin finishing 21

22 Non-iron zero add FA resin finishing Current technologies to achieve 16 ppm FA: Moist cure crosslinking + wash + top finish Pad-dry-cure + wash + top finish Replacement technology: BASF Fixapret Resin WFF CLASS I Pad-dry-cure process No washing off step required Reductions in water consumption Reductions in effluent load No top finishing (pad-dry) Reductions in energy 22

23 Delivering Solutions Low temperature cotton bleaching Non-iron zero add formaldehyde resin finishing Low temperature reactive washing-off Biodegradable sizing - 27% COD vs. Starch/PVA Zero add formaldehyde pigment printing 23

24 Performance Chemicals Summary BASF Who we are and what we do Vision 2050 One Planet Scenario Measuring Sustainability BASF Putting FUTURE into Textiles The 21st century economy needs to deliver prosperity in a resourceconstrained, energy-constrained world. BASF talent and technology are focused on creating the products for new economy today. If you're seeking to develop the products of the future, join forces with us. 24

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