chemical verbund production in the heart of europe · uncertainty of estimates, forecasts and...

BASF Antwerp: Chemical Verbund production in the heart of Europe

150 years

Wouter de Geest Managing Director BASF Antwerp N.V. June 24, 2015

150 years

BASF Investor Visit Antwerp, June 24, 2015 3

Cautionary note regarding forward-looking statements

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

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BASF Investor Visit Antwerp, June 24, 2015

BASF’s Verbund site Antwerp

… is the second-largest Verbund site of BASF

… has competitive advantages through unique Verbund site integration

... is continuously improving cost structures by technological and operational excellence

… has lean and reliable logistics

… supplies into growth markets

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1 | BASF’s Antwerp site at a glance

2 | Leveraging Verbund advantages

3 | Positioned for further growth

150 years


Global Verbund sites of BASF Antwerp is BASF’s second-largest Verbund site

.

Kuantan

Nanjing

Antwerp

Ludwigshafen

Freeport

Geismar

150 years


BASF Antwerp – Ideally located in the heart of Europe

Stockholm

500 km

750 km

1000 km

Dublin

250 km

London

Bern

Vienna

Berlin Warsaw

Amsterdam

Antwerp

Paris

Ludwigshafen

.

150 years


The Benelux chemical cluster BASF Antwerp: Supplier and customers at arm’s length

Belgium

Exxon Mobil

Ineos Dow

Dow

Total BP Chemical Versalis

Borealis

Sabic

Celanese

Exxon Mobil

Exxon Mobil

Bayer Lanxess Borealis Ineos

Ineos

Solvay/SolVin

ELLBA

Shell Shin-Etsu LyondellBasell Dow Shell

Huntsman LyondellBasell

Ethylene pipeline Propylene pipeline

Netherlands

Antwerp

Total Lanxess Solvay/SolVin

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150 years

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BASF Verbund site Antwerp at a glance

Sales ~€7 billion in 2014

Site area 6 km2

Production facilities more than 50 production plants

Investments* ~€150 million/a

Sales volumes 7.6 million metric tons

Volume handled 15 million metric tons

Employees BASF ~3,100

* Average last five years p.a.

150 years

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Safety first Maintain focus on safe behavior

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

** VIBNA: Association of Industrial Companies in Northern Antwerp. *** As from 2011, including Styrolution Belgium N.V. and EuroChem Antwerpen N.V.

* As from 2005, based on data from Fund of Occupational Accidents.

Industry Belgium*

Chemical industry Belgium*

VIBNA**

BASF site Antwerp***

LTI frequency rate*

BASF Antwerp: Good safety track-record versus industry benchmarks

*Lost Time Injuries (LTI) per 1 million hours worked

150 years

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Antwerp’s contribution to BASF segments Involved in BASF’s core chemical activities

Petro-chemicals Care chemicals Performance materials

Monomers

Intermediates

Performance chemicals


Oil & Gas Crop protection Crop Protection

Monomers

Intermediates

Performance chemicals

Catalysts

Construction chemicals

Coatings

Construction Chemicals

Coatings

Petrochemicals Care Chemicals Performance Materials

Monomers

Intermediates

Performance Chemicals

Dispersions & Pigments

Nutrition & Health

Oil & Gas Agricultural Solutions Chemicals Performance

Products Functional Materials & Solutions

Antwerp

150 years

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Antwerp’s contribution to BASF segments Key products


Intermediates


Intermediates

Petrochemicals Care Chemicals Performance Materials

Monomers

Intermediates

Ethylene Propylene Benzene Acrylic acid

MDI Ammonia Caprolactam

Amines Formaldehyde

Performance Chemicals

Superabsorbents Surfactants

Oil & Gas Chemicals Performance Products

Functional Materials & Solutions

Polyisobutylene

Polyether polyols

Agricultural Solutions

150 years

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Contribution to BASF Group sales 2014

Rest of BASF 91%

Antwerp

2014 ~€74 bn*

Antwerp Rest of BASF

Sales in € million

0 5.000 10.000 15.000 20.000

Other

Functional Materials

Performance Products

Chemicals

BASF Antwerp generates about 1/10 of BASF Group 3rd party sales * Incl. Oil and Gas and Agricultural Solutions.

~€7 bn (9%) & Solutions

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1 | BASF’s Antwerp site at a glance 2 | Leveraging Verbund advantages


150 years

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We add value as one company

People Verbund

Technology Verbund

Production Verbund

Customer Verbund BASF

150 years

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Production Verbund – What is it? A unique concept and competitive advantage of BASF

Verbund synergies

Econ

omie

s of

sca

le

The Verbund is all about intelligent interlinking of production plants, energy flows and infrastructure

It allows BASF to reduce its raw material and energy use

>€1 billion of global annual cost savings through Verbund

150 years

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Verbund Simulation Verbund means efficiency and flexibility – if steered intelligently

Verbund simulator enables

Optimized operations

Efficient utilization of assets

Management of value chains

Verbund proved flexible in 2008 / 2009 crisis

Capacity reductions

Flexible placement of people

Retained profitability

Flying start out of the crisis

Verbund does allow for portfolio changes

e.g. fertilizers, styrenics

Demand forecast along BASF value chains

Optimized production

plan management

150 years

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Verbund generates >€1 bn p.a. global cost savings*, supports sustainability A competitive advantage of BASF

* Savings include only tangible synergies.

Production of 80% of the entire energy demand from processes. Reduction of 2.4 million metric tons of CO2

Combi terminal saves 150,000 truck loads (equalling 300,000 metric tons of CO2)

Shared use of on-site facilities (e.g. fire department, security, waste water treatment)

BASF Antwerp

150 years

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BASF Antwerp – Energy Verbund State-of-the-art energy efficiency

Steam production Steam consumption

Energy profile production processes Antwerp

Energy producing

processes

Energy consuming processes

Verbund of energy-producing and energy-consuming processes reduces net energy demand

150 years

20


BASF Antwerp – Logistics Verbund Reliable and lean logistics

Ship 56%

Train 3%

15 million metric tons*

Pipeline 29%

Road 12%

Continuously improving logistics: Costs, reliability, lead time, sustainability

* Volume handled in/out2014

150 years

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BASF Antwerp – Infrastructure Verbund Effective use of common infrastructure

Product Verbund

Utilities Verbund Air Liquide Hydrogen

Air Liquide CO-Pipeline from Bergen op Zoom NL

Hydrogen CO Nitrogen Oxygen

Air Liquide Network Northern Europe

Air Liquide on BASF

site

Air Separation Unit

3,200 t/d Oxygen

Hydrogen 200,000 Nm3/h

CO-plant 9,800 Nm3/h

Nitrogen

Oxygen

Compressed Air

Energy Utilities Personal

CO

Isocyanate Aniline Amine

Ethylene oxide Hydroxylamine/Anon

Water treatment Ethylene dichloride

(SolVin)

H2

Syngas CO/H2

BASF Antwerp

Cost savings through joint use of infrastructure and utilities

150 years

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Most of the cracker output in Antwerp is used for downstream value capture

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Merchant Market

Value chains of the BASF

Verbund

Ethylene Propylene Butadiene Raffinates Benzene

Cracker products

2/3 1/3

150 years

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Verbund site Antwerp – Key value chains Creating synergies along the value chain

Ethylene

Propylene

Benzene

Ethylene oxide

Acrylic acid

Surfactants

Acrylates

Ethylene glycol

Ethanol amine

Pure acrylic acid

Nitrobenzene Aniline

Ethylene amine

Superabsorbents

MDI

Nitric acid Hydrogen Formaldehyde Phosgene

Steamcracker

150 years

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MDI – Key value chain Integrated world-scale plant

Rigid & microcellular polyurethane foams

MDI (Methylene diphenyl

diisocyanate)

Polyether polyols + =

MDI is mainly used captively; further value capture by BASF polyurethane systems

150 years

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MDI – Product applications Supplying into growth markets

MDI demand expected to grow significant above GDP (2013-2020)

Growth driven by:

– Increasing demand for energy efficiency

– Increasing standard of living (e.g. footwear, furniture, performance textiles)

– Transportation and construction

Key facts

150 years

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MDI production – Cost excellence Continuous process improvements in MDI

Increased real capacity by incremental process innovations

* Production cost = Personnel, maintenance and energy cost (inflation-adjusted).

Significant capacity increase

2015 2012

Process improvement program MDI/Antwerp Target:

– Increase production output by continuous process improvement via incremental steps

Expected benefits: – Increased sales – Production cost* reduction

Annual EBIT improvement: ~ €50 million/a

150 years

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MDI production – Cost excellence Continuous process improvements in MDI

Process improvement program 2000-2013 MDI/Antwerp Target:

– Increase production output by continuous process improvement via incremental steps

Achieved benefits: – Increased sales – Production cost* reduction

Strong increase of production output in the last decade

1992 – 2001 2009 – 2013 2002 – 2008

* Production cost = Personnel, maintenance and energy cost (inflation-adjusted).

Measures implemented since 2000 have led to an EBIT improvement of now >€200 million/a

150 years

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Acrylic acid – Key value chain Value chain contributes cash flow of approx. €1 billion*

Propylene (Steam cracker)

Acrylic acid

Acrylic dispersions

Acrylic esters

Superabsorbent polymers

Chemicals Performance Products

Each value chain step represents a potential merchant market outlet

* BASF Group 2012.

150 years

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Acrylic acid – Product applications Supplying into growth markets

Acrylic acid demand expected to grow above GDP (2013-2020)

Growth driven by emerging markets; rising middle class leads to increased demand for diapers, coatings & paints, adhesives, construction, textiles

Key facts

About 2/3 of BASF’s acrylic acid is used captively

150 years

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Acrylic acid – Technology Leveraging the BASF technology Verbund

Focused R&D to continuously improve acrylic acid process

Highly selective and efficient process catalysts

Proprietary technology for new process

– Higher yield

– Lower energy consumption

– Lower investment costs

In addition, four radically new processes being investigated in research; one based on renewable raw materials

150 years

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Acrylic acid – Cost excellence Leading technology strengthens profitability

Continuously improve productivity

Smart capacity increase by run-time extension and higher throughput

Innovation and improvement ideas come from all production sites and are quickly implemented

Acrylic acid production technology benchmark Industry average costs = 100; normalized

Source: BASF estimate.

80

85

90

95

100

BASFnew process

BASFclassic process

Industry average

BASF with best-in-class acrylic acid process

150 years

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BASF Antwerp – Hydrogen peroxide-based propylene oxide plant First world-scale HPPO plant*

Cost advantages through jointly used infrastructure and utilities

* Partnership between BASF, Solvay and Dow Chemicals

Propylene oxide production without any by-products, except water

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150 years


Butadiene extraction plant Successful startup September 2014

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Key facts

Production capacity of 155,000 metric tons p.a.

Strengthening of Antwerp Verbund site

Securing BASF’s internal supply of butadiene in Europe

Taking advantage of merchant market opportunities

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1 | BASF’s Antwerp site at a glance

2 | Leveraging Verbund advantages


35


… is the second-largest Verbund site of BASF

… has competitive advantages through unique Verbund site integration

... is continuously improving cost structures by technological and operational excellence

… has lean and reliable logistics

… supplies into growth markets

BASF’s Verbund site Antwerp

► ... is positioned for further growth

150 years

BASF Investor Visit Antwerp, June 24, 2015 36 36

150 years

chemical verbund production in the heart of europe · uncertainty of estimates, forecasts and...

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