BASF Aligns Research Even More Closely to Future Topics, Global Markets and Customer Industries

Ludwigshafen, Germany – March 29, 2012 – BASF is realigning its research and is focusing even more strongly on the market and the global customer industries. Alongside the further development of the established business portfolio, the main research emphasis is being placed on growth and technology fields that address social challenges and offer BASF relevant business potential. This new orientation is based on BASF's ”We create chemistry” strategy through which the company is intensifying its focus on sustainability and innovation as growth drivers. For 2012, BASF is planning to increase its research and development spending to €1.7 billion (previous year 2011: €1.6 billion). “To seize growth opportunities we are systematically expanding our product and technology portfolio, establishing an even more global presence and increasing our efforts to develop solutions for a sustainable future,” said Dr. Andreas Kreimeyer, member of the Board of Executive Directors of BASF and Research Executive Director at today’s Research Press Conference in Ludwigshafen, Germany.

In 2020, BASF wants to achieve sales of around €30 billion with products that have not been on the market for longer than ten years. To accomplish this, BASF is strengthening its collaboration with key industries and concentrating on growth fields relevant to society such as “heat management”, “water treatment” and “organic electronics”. These are new business areas for BASF with high growth potential. At the same time, enabling technologies have been defined – such as raw material change, material systems and nanotechnology as well as white biotechnology – which are needed to generate solutions for the growth fields.

In order to implement the new orientation most effectively, the research platforms have been tailored to the various business and technology areas and assigned specific topics. Thus, the activities of the platform “Process Research & Chemical Engineering” concentrate on new technologies, processes and catalysis. The topics crop protection, organic electronics and white biotechnology are being pursued in the research division “Biological & Effect Systems Research”. In the research platform “Advanced Materials & Systems Research”, activities are focused mainly on new polymeric materials and system solutions and the fourth platform “Plant Science”, is continuing its research into plant biotechnology.

In addition, BASF Future Business, which opens up new business areas for the company, is being expanded. It is responsible for developing and marketing business areas new for BASF. At present, the focus is on the topics “energy management”, “organic electronics” and “medical solutions.” In addition, BASF Venture Capital, a subsidiary of BASF Future Business, is investing in start-up companies specializing in innovative chemistry and system solutions in BASF's growth and technology fields.

“The aim of the new structure is to significantly expand our portfolio of functionalized materials and system solutions and continue improving our position in the emerging markets,” explained Kreimeyer. “We want to strengthen our technological and operational excellence, create value from interdisciplinary innovations and position our activities globally scale to meet the needs of the markets.”

Solutions from chemistry for better health

One of the customer industries on which BASF will be concentrating further in future is the branch “Health and Nutrition”. BASF already supplies numerous products for this market. With the introduction of new photostable UV filters for instance the company has established itself as a global technology and market leader. About every second sunscreen product contains BASF's UV absorbers. Two important innovations are the broadband UV filters Tinosorb® S and Tinosorb® M, which protect the skin against both UVA and UVB rays. Tinosorb S is an oil-soluble, organic UV absorber which is also used in daily care products. With Tinosorb M, BASF has the first and only insoluble, organic UV absorber on the market. It is often used in products with a high sunscreen factor and in sun creams for children.

BASF is also making a significant contribution in the health sector with its pharmaceutical excipients. The bioavailability of pharmaceutically active substances is a topic of growing importance because active substances are becoming ever more complex, often with an associated loss of solubility. The body cannot absorb undissolved active substances. With Soluplus®, BASF has developed a polymeric solubilizer which can also make high active substance concentrations available for the body. Another new polymer is the tablet coating system Kollicoat® Smartseal 30 D, the first polymer for this application which is marketed as an aqueous solution. Kollicoat Smartseal 30 D protects the active substance against moisture and masks the bitter taste of some active agents because the coating does not dissolve until it reaches the stomach.

The topic “water” also plays a central and increasing important role in the health sector. The need for clean water is increasing because of the growing world population and industrialization. Worldwide consumption of this resource has increased tenfold over the past 100 years. BASF's products and solutions for water treatment include flocculating and coagulating agents for waste water treatment and also membranes for (ultra)filtration, for example of drinking water, an area of work that BASF also establishes with the acquisition of inge watertechnologies in 2011. The plastic membranes also contain pores that are only 20 nanometers in size, allowing germs, bacteria and even viruses to be filtered out of the water. BASF estimates the market in the growth field water of €20 billion, representing a growth potential of more than €800 million.

More innovative strength through global research

“Effective and efficient research is an important success factor for achieving our growth targets and is simultaneously a factor distinguishing us from our competitors. Research and development will therefore have even greater priority in future than before,” emphasized BASF's Research Executive Director. In 2011, the number of employees working in research and development increased to around 10,100 (previous year 2010: 9,600). In the markets of North and South America as well as Asia that are important for the chemicals business, however, BASF research is still underrepresented. “We will have to expand our presence and speed up our activities in these regions.” A first step in this direction is the new Innovation Campus in Shanghai scheduled to open at the end of this year. “By creating innovations in Asia for Asia, we want to grow with our customers. By 2020, we want to double our research activities in Asia and the Americas and conduct 50 percent of our research and development outside Europe,” explained Kreimeyer.

An important asset for globalized research is an international network of outstanding external researchers. BASF is already working in around 1,950 cooperations worldwide with universities, research institutes, start-ups and partners from industry. One example is the “Joint Research Network in Advanced materials and Systems” (JONAS), a new initiative for researching functional materials in partnership with the universities of Strasbourg and Freiburg as well as ETH Zürich. “An extensive network of this type is indispensable to rapidly develop and market products that are durable, suitable for everyday use and affordable,” emphasized Kreimeyer.

For more information about the new research strategy, please go to:

http://www.basf.com/group/forschung

For press photos, please go to:

http://basf.com/group/pressrelease/P-12-194

About BASF

BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. We combine economic success, social responsibility and environmental protection. Through science and innovation we enable our customers in almost all industries to meet the current and future needs of society. Our products and system solutions contribute to conserving resources, ensuring healthy food and nutrition and helping to improve the quality of life. We have summed up this contribution in our corporate purpose: We create chemistry for a sustainable future. BASF posted sales of about €73.5 billion in 2011 and had more than 111,000 employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). Further information on BASF is available on the Internet at http://www.basf.com

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