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BASF
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BASF SE () is a German chemical company and the largest chemical company in the world. BASF originally stood for Badische Anilin- und Soda-Fabrik (Baden Aniline and Soda Factory). Today, the four letters are a registered trademark and the company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock Exchange. The company delisted its ADR from the New York Stock Exchange in September 2007.
The BASF Group comprises more than 160 subsidiaries and joint ventures and operates more than 150 production sites in Europe, Asia, Australia, Americas and Africa.
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Encyclopedia
BASF SE () is a German chemical company and the largest chemical company in the world. BASF originally stood for Badische Anilin- und Soda-Fabrik (Baden Aniline and Soda Factory). Today, the four letters are a registered trademark and the company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock Exchange. The company delisted its ADR from the New York Stock Exchange in September 2007.
The BASF Group comprises more than 160 subsidiaries and joint ventures and operates more than 150 production sites in Europe, Asia, Australia, Americas and Africa. Its headquarters are located in Ludwigshafen am Rhein (Rhineland-Palatinate, Germany). BASF has customers in over 200 countries and supplies products to a wide variety of industries. Despite its size and global presence BASF receives little public attention as it abandoned consumer product lines in the 90s.
At the end of 2008, the company employed more than 96,000 people, with over 47,000 in Germany alone. In 2008, BASF posted sales of €62 billion and income from operations before special items of over €6.8 billion. The company is currently expanding its international activities with a particular focus on Asia. Between 1990 and 2005, the company invested €5.6 billion in Asia, for example in sites near Nanjing and Shanghai, China and Katipalla in India.
History
BASF was founded in Mannheim, Germany, by Friedrich Engelhorn in 1865 for the production of dyes. The plant, however, was erected at the other side of the Rhine river at Ludwigshafen because the town council of Mannheim was afraid that the air pollution of the chemical plant could bother the inhabitants of the town.
In 1867, research into synthesis of the dye indigo was successfully concluded. Until this time, indigo was extracted from plants and was expensive. Industrial production meant that the price could be cut drastically, and one effect was to make jeans affordable work clothes. The development of the Haber process from 1908 to 1912 made it possible to synthesize ammonia (commonly used in chemical and pyrotechnic warfare as well as some fertillizers), and in 1913 BASF started a new production plant in Oppau, adding fertilizers to its product range. BASF also acquired and began mining anhydrite for gypsum at the Kohnstein in 1917..
As a result of this monopoly, BASF was able to start operations at a new site in Leuna in 1916, where explosives were produced during the First World War. On September 21, 1921, an explosion occurred in Oppau, killing 565 people. This was the biggest catastrophe in German industry (see Oppau explosion). Under the leadership of Carl Bosch, BASF founded IG Farben, Hoechst, Bayer, and three other companies, thus losing its independence. BASF was the nominal survivor, as all shares were exchanged for BASF shares prior to the merger. Rubber, fuels, and coatings were added to the product range. Following the appointment of Adolf Hitler as Chancellor in 1933, IG Farben cooperated with the Nazi regime, profiting from guaranteed volumes and prices, and from the slave labor provided by the government's concentration camps. IG Farben also achieved notoriety owing to its production of Zyklon-B, the lethal gas used in Nazi extermination camps. In 1935, IG Farben and AEG presented the magnetophone – the first tape recorder – at the Radio Exhibition in Berlin.
The Ludwigshafen site was almost completely destroyed during the Second World War and was subsequently rebuilt. The allies dissolved IG Farben in November 1945. On July 28 1948, an explosion in which 207 people died occurred in Ludwigshafen. In 1952, BASF was refounded under its own name. With the German economic miracle in the 1950s, BASF added synthetics such as nylon to its product range. BASF developed polystyrene in the 1930s and invented Styropor in 1951.
In the 1960s, production abroad was expanded and plants were built in Argentina, Australia, Belgium, Brazil, France, United Kingdom, India, Italy, Japan, Mexico, Spain and the United States. Following a change in corporate strategy in 1965, greater emphasis was placed on higher-value products such as coatings, pharmaceuticals, crop protection agents and fertilizers. Following the reunification of Germany, BASF acquired a site in Schwarzheide, eastern Germany, on October 25 1990.
On May 30 2006, BASF bought the Engelhard Corporation for 4.8 billion USD. This takeover is the largest takeover in the company's history. BASF is now the world's largest manufacturer of catalytic converters.
Other acquisitions in 2006 were the purchase of Johnson Polymer and the construction chemicals business of Degussa.
The acquisition of Johnson Polymer was completed on July 1, 2006. The purchase price was $470 million on a cash and debt-free basis. It provides BASF with a range of water-based resins that complements its portfolio of high solids and UV resins for the coatings and paints industry and will strengthen the company’s market presence, in particular in North America.
Also on July 1, 2006 the acquisition of the construction chemicals business of Degussa AG was completed. The purchase price for equity was just under €2.2 billion. In addition, the transaction was associated with debt of €0.5 billion.
There has been criticism from anti-biotechnology protest groups at BASF' plans for wanting to hold trials of GMO potatoes in the UK.
The company agreed to acquire Ciba Specialty Chemicals (formerly part of Ciba-Geigy) in September 2008. The proposed deal is currently under review by the European Commissioner for Competition, with a decision expected on 12 March 2009.
Business segments
BASF operates in a variety of markets. Its business is organized in the segments Chemicals, Plastics, Performance Products, Functional Solutions, Agricultural Solutions and Oil & Gas. The company occasionally advertises to the public using the tagline "At BASF, we don't make a lot of the products you buy. We make a lot of the products you buy better." Its slogan is "BASF The Chemical Company".
Chemicals
BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
Plastics
BASF offers a comprehensive product line and market expertise ranging from commodities to engineering and high-performance materials in thermoplastics, foams and urethanes.
BASF's Engineering Plastics consists of the "4 Ultras" - polyamide (PA) nylon-based resins, polybutylene tererphthalate (PBT), polyacetal (POM), and polysulfone (PSU) and polyether sulfone (PES).
BASF Styrenics consists of the Foams and Copolymers. BASF's styrenic copolymers have applications in electronics, building and construction, and automotive components.
BASF's Polyurethanes business consists of diverse technologies and finished products. Urethane chemicals are raw materials used in rigid and flexible foams commonly used for insulation in the construction and appliance industries, furniture, packaging and transportation.
Foams like are generally used as insulating materials. They are eco-efficient and offer advantages over other materials in terms of cost-effectiveness, preservation of resources and environmental protection. Investments made for insulating materials usually pay for themselves within a short time and contribute to retaining and even enhancing the value of buildings.
BASF is a manufacturer of polyamide precursors and polyamide. BASF offer polyamide 6 and polyamide 6,6 polymers as well as precursors.
BASF was a pioneer in manufacturing and developing biodegradable plastic, namely, . , consists of and a high content of polylactic acid.
Performance products
BASF produces a range of performance chemicals, coatings and functional polymers. These include raw materials for detergents, textile and leather chemicals, pigments and raw materials for adhesives. Customers are the automotive, oil, paper, packaging, textile, sanitary products, detergents, construction materials, coatings, printing and leather industries.
Functional chemicals
BASF Cosmetic Solutions specializes in chemicals that many name brand skin care companies worldwide use to formulate their own products. Chemical types such as but not limited to: emulsifiers, solubilizers, anionic surfactants, glycol polymers, colorants, styling polymers, hair setting resins, conditioning agents, thickening polymers, emollients and UV absorbers.
Agricultural
BASF's crop protection division is a supplier of agricultural products and chemicals for agriculture and animal nutrition, and for the pharmaceutical, food and cosmetic industries. In the field of plant biotechnology, BASF is concentrating on solutions for effective agriculture, healthier nutrition and plants to make products more efficiently. Products from this segment include fungicides, herbicides, insecticides as well as vitamins, pigments and pharmaceutical active ingredients. Their major products include F500 (pyraclostrobin), Boscalid, Fipronil, and the Clearfield Production System. Recently, the company has diverted their research interests to Nutrigenomics to tailor the social responsibility of public health .
Oil and gas
BASF explores for and produces oil and gas through its subsidiary Wintershall Holding AG. In Central and Eastern Europe, Wintershall works with its Russian partner Gazprom.
Investors
72% of the BASF shares are held by institutional investors (AXA SA more than 5%, Allianz AG 2.6% and General Capital Group 2.1%). 45% of the shares are held in Germany, 17.3% in the UK and 13.5 % in the U.S.
Production
BASF's recent success is characterized by a focus on creating resource efficient product lines after completely abandoning consumer products. This strategy was reflected in production by a re-focus towards integrated production sites. The largest such integrated production site is located in Ludwigshafen employing 33,000 people.
Integrated production sites are characterized by co-location of a large number of individual production lines (producing a specific chemical), which share an interconnected material flow. Piping is used ubiquitously for volume materials. All production lines use common raw material sourcing and feed back waste resources, which can be used elsewhere (e.g. steam of various temperatures, sulfuric acid, carbon monoxide etc.). The economic incentive for this approach is high resource and energy efficiency of the overall process, reduced shipping cost and associated reduced risk of accidents. Due to the high cost of such an integrated production site it establishes a high entry barrier for competitors trying to enter the market for volume chemicals.
Environmental record
In 2006 BASF was praised by the Climate Leadership Index for their efforts in problems with climate change and greenhouse gasses in our world. In recent years the BASF Company has set aside a large portion of their R&D budget on resource conservation. One of their recent developments has been creating filters for wastewater treatments plants that help to reduce emissions. Another recent environmental move the BASF Company has done is formed a partnership with Columbia University. The BASF Company and Columbia University came together so that they can further research “environmentally benign and sustainable energy sources”. The company has recently reported their emissions in 2006 to be “1.50 million metric tons of waste.” Even though it is a lot of waste, BASF has shown improvement in that they have steadily reduced their waste emissions in the last few years.
Cooperation with Monsanto
The BASF is cooperating with Monsanto in research, development and marketing of biotechnology.
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