Press Release. Plastic Additives: Jointly enabling the future of plastics. Press conference K 2013 June 25 and 26 in Ludwigshafen
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1 Press Release June 25, 2013 P 293/13e Birgit Wesche Phone: Fax: birgit.wesche@basf.com Press conference K 2013 June 25 and 26 in Ludwigshafen Plastic Additives: Jointly enabling the future of plastics Presentation by Hans W. Reiners President Performance Chemicals Division BASF SE The spoken word applies. BASF SE Mannheim Germany Phone: Global Communication Performance Chemicals
2 page 2 P 293/13e Ladies and Gentlemen, It is my pleasure to be here with you today. Three years ago I was also here, or more precisely, at the Conference Center in Frankenthal, for the K 2010 Press Conference. Back then, our Plastic Additives business had just risen to become the global market leader in plastic additives, thanks to the combination of the two portfolios of Ciba and BASF. A great deal has happened since then. We have taken our position as market leader very seriously, and in the market today, our customers value us as the reliable, global partner. We want to maintain and build on this leadership position for the future. We are also keeping a close eye on trends and developments in the polymer industry and actively addressing changes. The two speakers before me, Martin Brudermüller and Raimar Jahn, have already talked about these trends specifically. There are benefits that we and we alone can offer to the market. We have now clearly stated and even more precisely mapped out those benefits. K 2013 is the perfect occasion for us to stage our market positioning and present specific examples of these benefits. So what does that mean exactly? The Industry Trusts the Original As you can see, we are for sure the market leader in antioxidants, UV stabilizers and pigments. And we are also the only supplier to offer this portfolio worldwide. We have unique know-how, a deep understanding of the market and are committed worldwide. These are all reasons why customers put their trust in the Original and choose BASF as their partner.
3 page 3 P 293/13e Industry has trusted our plastic additives for over 50 years. This is not only because of our high standards of quality, but also because of the reliability and expertise that stands behind the products. Our work to develop pigments for sensitive applications is a good example of this. All over the world, limits are constantly being tightened, whether for food products, pharmaceuticals, or toys. A global manufacturer must comply not only with EU regulations and the laws of its member states, but also with the rules set by the FDA in the United States and the JHOSPA in Japan. We at BASF go even a step further: we already provide solutions to help our customers to address the needs of the future. Staying within these limits is far from easy. This is why we have established a comprehensive screening program which helps our customers use BASF pigments correctly in sensitive applications. We don t just look at past results but also strive to anticipate trends, on a global basis. And of course we don t just do this for our pigments, but for our other additives such as UV stabilizers as well. Our solutions benefit both our customers and the world at large. Ricard Vandellos will say more tomorrow about how our competence and experience can help our customers with this difficult choice in his talk, Plastic Additives for Sensitive Applications. A Global Partner Offering Tailored Solutions The screening program is a good example of how we work together with our customers to respond to changes in the market. One thing is clear: The market for plastic additives has changed substantially in the last few years. And although it has become more globalized overall, there are still considerable regional differences, especially in downstream business.
4 page 4 P 293/13e Our deep understanding of the industry, our excellent integration along the value chain and our high technical competence enable us to tailor our offerings to the precise needs of our customers. We understand, and we seek constantly to understand better, what our customers do and what drives them, so that we can continue to be - the most valued Partner for the plastics processing industry. As a partner, we naturally want to continue to develop products and open up new applications, for and with our customers. In doing so, we want to focus our development work even more towards highgrowth and profitable areas. Therefore, we are creating global competence centers in which we bundle our know-how in applications and industries with high innovation potential. Focusing our competence in development and application technology creates unique advantages for our customers as well as for our business. We are creating real clusters of excellence, which bring together the knowledge and experience of a worldwide market leader and build on it to develop new, practical and customer-focused solutions. For example, development work for the automotive industry is concentrated at the Automotive Competence Center in Basel, Switzerland. Another example that shows that we approach this industry with a holistic view including offerings targeting designers and brand owners directly is Steron - an advanced coating technology about which Heidrun Goth will speak a bit more tomorrow. But now back to focusing our competences: Alongside Shanghai, China, where we are optimizing the stabilization of special polymers, our Building & Construction Competence Center at Tarrytown in the US is developing innovative solutions for sustainable plastics applications
5 page 5 P 293/13e in the construction sector. The US is at the forefront of a lot of innovative construction applications, so technologies developed for the local market are also relevant for other regions. Focus applications here include siding, roofing membranes, and pipes. We are thus retaining our regional service functions while bundling our global know-how, so we will remain close to our customers as a Partner across the globe. This means we get the maximum benefit out of being a global player. Only BASF can do this because we are the only true global supplier. Some of our competitors claim to be global, but the proof is lacking. We create facts on the ground, such as the state-of-the-art production plant for customer-specific antioxidant blends that came on stream at the end of last year in Bahrain. The plant will serve demand in the Middle East and Asia regions in particular. Both regions are growing at above-average rates, and this is expected to continue well into the future. For the same reason, we are currently investing in one of the world s most modern antioxidant plants in Singapore, a key location for the Asian market. Here we expect to start producing Irganox 1010 in the second half of this year. Irganox 1010, by the way, is a product which celebrates its 50th anniversary this year. Frithjof Netzer will provide you with more insight into the opportunities that our global presence creates and how we want to play an active role in our customers future growth, in his talk tomorrow entitled The Next Step in a Growth Market.
6 page 6 P 293/13e Better performance through increased focus Of course, we adapt the solutions we offer to the needs of the market. That applies to our global production network, our service provision, our focus areas for R&D and of course our product portfolio. There is always a trade-off between the best that can possibly be achieved and what the market is willing to pay for. This raises the question: What is Performance? Optimal performance does not necessarily mean achieving the best possible results in everything, for example the most comprehensive and diverse product range it means creating the maximum possible value for our customers and for us. That means that we need to take complexity out of our business, so that we can be quicker, more flexible and more effective. Which means: Sometimes less is more. Since 2009/10, we have been taking steps to make our very comprehensive combined product portfolio of 4,200 products more focused. At the end of 2012, we came down to around fifteen hundred products, and we have targeted a reduction of several hundred more this year. Over the last few years we have been making our customer portfolio more focused too. Upstream, we are concentrating on innovation leaders, with whom we drive forward new products and processes, on global polymer manufacturers, who value our worldwide production and technical service network, and on regional champions, who we assist in rapidly growing local markets such as China or Brazil. Downstream, we are focusing on the leading masterbatchers and a selection of innovative plastics processors. We also have a highly competent, global distributor network for all the customers we don t supply directly.
7 page 7 P 293/13e Focus also means adapting our organization to changes in market conditions. In April, therefore, BASF announced substantial restructuring measures for the Basel area. Amongst some other businesses, R&D and several global support functions, our European Plastic Additives business is also located in Basel. This organizational reshaping, a process North America and Asia have already gone through in 2011 and 2012, is essential if we want to maintain the success of our Plastic Additives business in the future. Breaking New Ground Together With Our Customers All of these efforts are necessary so that we can support the plastics industry with intelligent and innovative additive solutions. We see ourselves as pioneers. This is not to say we are adventurers constantly looking to reach new extremes. What we mean is exploring new possibilities and unlocking potential together with our customers, whereby we always have our eye on a concrete application even if it only becomes visible from a long-term perspective. As the market leader for plastic additives, we are already applying this approach today, looking ahead to issues which will impact the plastics industry in the future. For example, our R&D teams are working on significantly increasing the effectiveness of antioxidants, so that far lower concentrations can be used in plastic packaging. It is still too early to give details today but we will keep you informed. An excellent example of this pioneering spirit and one which directly affects our everyday lives is new methods of plastics recycling.
8 page 8 P 293/13e Plastics are already recycled today, as everyone who sorts their recyclable from their non-recyclable waste knows I hope that includes all of you in this room! It is not the case, however, that recycled PET bottles, for example, can simply be used to make new PET bottles, because recycled materials are generally less stable than the originals. At least, that has been the case up to now. Things may be different in the future because BASF additives not only make materials easier to recycle, they also help give some recycled materials qualities which not even new plastics can compete with. This enables us to create economic value at the same time as offering sustainable solutions for society and the environment. Christian Lach will tell us more about how upcycling can replace downcycling tomorrow, in his talk, Better than new! Sustainable Solutions Thanks to Plastic Additives Upcycling is not just innovative technology. It s also a contribution to sustainability, which is an important aspect of BASF s global strategy: We create chemistry for a sustainable future. And if we re talking about visions for the future, then two things that occur to me are strawberries and tomatoes. Have you recently eaten a tasty tomato salad, or some fresh strawberries? If you have, then it s highly probable that they were at least partly grown under plastic films. Greenhouses made of plastic films help farmers to ripen their produce faster and more evenly and also more ecologically, because covered fruit needs less water. As the technological leader in light stabilizers, we offer a broad range of additives for greenhouse films as well as alternative solutions to nickel quencher technology, which is attracting increasing criticism
9 page 9 P 293/13e and also leads to a yellowing of the plastic film. Our Tinuvin XT 200 product offers significant advantages. Because no heavy metals are used, it can be disposed of at the end of its life cycle in a more environment-friendly way, whether it is incinerated, dumped or recycled. And because it doesn t turn yellow, transparent sheeting made out of it allows more sunlight to reach the plants, which considerably improves growth and yields. Current trials with tomatoes in Spain are showing a yield increase of over ten percent. And the tomatoes taste better too, because of their increased sugar content! Enabling Success Our innovative additives allow us to improve the processing properties of plastics, increase the lifetime of end products, create functional surfaces, and often to open up the space for our customers for new applications. This is what we call being an enabler. Martin Brudermüller already outlined: we want to create value as ONE company. Let me give you one more example for this: Polyolefins are affected by oxygen during processing and under certain environmental conditions, which naturally has unfavorable effects on the long-term performance of polyolefin applications. Our antioxidant experts are working with colleagues from BASF s Catalysts division on solutions which aim to enhance the stability of these polymers and open up new application possibilities for polyolefins. BASF is the only company that can support the whole polyolefin value chain with products and know-how. Something that is already visible today is the result we have created for Linde in cooperation with Amtrol-Alfa, a major manufacturer of steel cylinders for low-pressure gases. The cooperation is about gas bottles, in which large parts of the metal housing have been replaced by plastic. The high-strength plastic casing makes the Genie gas
10 page 10 P 293/13e bottle up to fifty percent lighter, which not only benefits the end user, but also saves a considerable amount of fuel during transportation. At the same time, our pigment preparations enable a huge spectrum of colors and designs to be offered, while our UV stabilizers increase the life of the plastic casing. By offering its expertise in life cycle analysis, BASF is also helping Amtrol-Alfa to understand the environmental advantages of its hybrid gas bottles compared to traditional systems. This shows that we don t just deliver components we also join our customers in looking at sustainability issues and advantages relative to other solutions, and we do so across every aspect of a product s lifecycle. Ladies and gentlemen, I hope I have been able to give you a good insight into the road BASF has taken in the Plastic Additives business and that I have shown you that we are clearly positioning ourselves to preserve and strengthen our position as market leader. We are the Original, the ones our partners trust. We offer them optimal performance across the globe. As a pioneer in plastic additives, we break new ground together with our customers. In doing so, we are working towards the vision that plastics will enable sustainable solutions to be found along the lines of trends and developments in our society. Jointly we are enabling the future of plastics. About BASF Plastic Additives The plastic additives business of BASF is a leading innovation partner, manufacturer and supplier of additives for the plastics industry such as ultraviolet (UV) light stabilizers, antioxidants and process stabilizers, organic and inorganic pigments, effect pigments, and other additives Further information is available on the Internet at
BASF Plastic Additives
BASF Plastic Additives Jointly enabling the future of plastics Hans W. Reiners Performance Chemicals Division BASF SE 0 BASF Plastic Additives: Global market leader The Original Our plastic additives portfolio
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