Record earnings for BASF: PU sales rise 23% in 2005

By Liz White, UT staffLudwigshafen, Germany-BASF's plastics business, which polyurethanes makes up more than a third of, recorded "significantly higher EBIT" up 46 percent on the previous year, at Euros 1015 million, said BASF chairman Dr Jürgen Hanbrecht, speaking at the group's 22Feb annual results meeting in Ludwigshafen. "This is remarkable in view of the high and volatile raw material prices with which we were confronted," Hambrecht commented. He added that, towards the end of 2005, pressure on margins increased. For the full year, BASF's polyurethanes division had sales of Euros 4291 million, a 23 percent rise over 2004. In PUs, the strongest growth was recorded in Asia Pacific, said Hambrecht. BASF's capital expenditure for 2005 in plastics was focused on Asia, where the plant for the basic PU materials MDI (methylene diphenyl diisocyanate) and TDI (toluene diisocyanate), which BASF is building with partners in Caojing, China, is scheduled to start operations in summer 2006, Hambrecht said. This extra capacity will help "meet the constantly rising demand in Asia, and in China in particular," said BASF. Material from Caojing will also provide starting materials for BASF to make specialities in Pudong, China-planned for 2007, the group added. Meanwhile, at Antwerp, Belgium, BASF said, it raised capacity for MDI from 450 000 to 560 000 tonnes. Fourth quarter sales in polyurethanes were Euros 11718 million, or 36.6 percent of BASF's plastics divisions sales. Higher sales prices and persistently strong sales volumes for PUs led to an increase in earnings compared with Q4, 2004, BASF said. As a whole, the plastics business of BASF saw a slight increase in volumes and sales in Q4, thanks to further price increases. In polyurethanes and performance polymers, the group had a "significant increase in earnings." Events in the quarter included the setting up in October 2005 of a systems house-CHC Elastogran Pty-in South Africa with a local partner to produce and market polyurethane systems. As a group, BASF achieved record 2005 sales of Euros 42 700 million (up 14 percent on the previous year) and income from operations (EBIT) before special items of more than Euros 6100 million (up 17 percent). "