BASF strategy set for major shake up

Ludwigshafen, Germany – BASF will streamline its business, concentrate more on higher added value products and increase its investment in China, CEO Martin Brudermuller is expected to say later this morning.

He is likely to promise faster growth with stronger focus on its customers and to develop tailor-made offerings for them.

BASF will do this through significantly simplified structures and processes, a sharper portfolio, and strengthening its integrated production system or Verbund.

'By 2030, China’s share of the market will increase to nearly 50%. We want to participate in this growth,' Brudermuller is expected to say.

BASF also wants to further increase profitability and targets an increase in EBITDA before special items of 3% to 5%/year. 'BASF aims to achieve a return on capital employed well above the cost of capital percentage every year,' Hans-Ulrich Engel is expected to say. Engel is vice chairman and CFO.

To achieve this growth, the firm will restructure into six business units. These will be more closely aligned with competitor organisations. They will be given greater autonomy to make decisions. 'We will enable more entrepreneurial freedom, but also assign clear responsibilities,' Engel is expected to say.

Operating divisions will decide which local markets they will treat as focus markets served by their own personnel. They will be able to  hand over less strategic business  to country organisations.

The company will simplify and shorten processes and enable faster decision-making.

Additionally, the company expects to decouple carbon dioxide generation by its processes from growth with ambitious reduction targets.