NEWS
BUSINESS Big year ahead for BASF CATH O’DRISCOLL
Judging by the spate of recent announcements, the year ahead looks set to be a tumultuous one for BASF. In December 2017, the chemicals giant announced a proposed merger of its oil and gas activities with those of international investment business, LetterOne group. If the deal goes ahead as planned, the new joint venture, Wintershall DEA, would be one of Europe’s largest independ- ent exploration and oil companies. Planned acquisitions by BASF of Bayer’s seed and herbicides busi- nesses, and of Solvay’s polyamide business are also on the table, along with investments to expand its offerings for customers in the automotive sector. ‘BASF has had a good start to
2018,’ said chairman Kurt Bock, speaking at the annual press conference in Ludwigshafen in February 2018. ‘Last year, we achieved significant growth and were able to further increase our profitability. Moreover, we laid important groundwork for the future development of our com- pany – in terms of both people
ENERGY EU battery demo boost MARIA BURKE
The European Investment Bank (EIB) has agreed a €52.5m loan to Swedish battery cell manufacturer Northvolt, part of an EU push to compete with Asian and US manufacturers of lithium-ion batteries. The loan will support a first-of-a-kind demonstration plant in Västerås, Sweden, for the manufacture of Li-ion batteries, and could help break Europe’s dependence on imported battery cells.
Although the financing, which also
involves EU funding, is not completely finalised, Northvolt expects to begin construction in the coming months. The site will comprise a research facility and demonstration plant, and employ between 300 and 400 people. The batteries will be
sold for use in transport, stationary storage and industrial and consumer applications. Eventually, Northvolt aims to build
Europe’s largest battery factory producing 32GWh/year of battery capacity. CEO Peter Carlsson, who used to work for Tesla, says his objective is to build the world’s greenest battery to enable the transition to an electric economy. This support from the EIB and EU means the company is now ‘one step closer to establishing a competitive European battery manufacturing value chain’. ‘With the growing momentum of clean energy and electric mobility, batteries will become ever more important,’ comments EIB vice-president Ambroise Fayolle. The European Commission has warned that the European industry is lagging behind in the manufacturing of batteries for electric
vehicles. The market is dominated by Japanese firms Panasonic and NEC, Korea’s LG and Samsung, China’s BYD and CATL, and Tesla of the US. Regulatory action to reduce carbon emissions combined with incentives to make electric cars more affordable has spurred significant investment in Li-ion batteries. Europe’s battery cell demand is projected to reach 200GWh by 2025 – a market worth an estimated €250bn/year. ‘Many of Europe’s great innovations in
clean energy technologies end up being produced elsewhere, meaning that others make much more money out of European innovations than we do. Today’s decision will help to correct this,’ said European Commissioner Carlos Moedas, in charge of research, science and innovation.
and strategy.’ Along with a strong financial
performance, the creation of this team of people will be his most important legacy, said Bock, who will also step down in May to be succeeded by deputy chief Martin Brudermüller. BASF’s overall sales were up 12% in 2017, to €64.5bn, the company reported, with earnings or EBIT before special items up 32% on 2016, at €8.3bn. An uptick in economic activity globally, and higher chemicals prices, were cited as the main reasons, with strong demand seeing volumes up in all divisions. Bock also referred to the positive impact
of its acquisition in late 2016 of Chemetall, which offers tailor- made solutions for metal surface treatment. Innovation remains at the core
of BASF’s business, Bock noted. In 2017, the company spent €1.9bn on R&D, on around 3000 research projects – including one to de- velop the blockbuster fungicide Revysol, expected to generate sales of over €1bn after launch in 2019. Products stemming from R&D projects in the previous five years netted more than €9bn in sales in 2017.
Digitalisation is already having
a dramatic impact on productiv- ity, Bock continued. Data mining
methods are helping to identify promising enzymes or suitable bacteria more quickly for biotech applications, gaining new insight from large existing data sets. BASF researchers, for example, have used digital technology to carry our ‘for the first time’ a systematic investigation of the available data on catalysts used in ethylene oxide production, he pointed out – work that should lead to more accurate and faster predictions about their performance and lifetimes. ‘We are increasingly using
digital technologies throughout our value chains…to design our processes more effectively and efficiently,’ Bock said. For 2018, the group reported
that it expects the global economy and global chemical production will grow at roughly the same rate – ca3 and 3.4%, respectively – as in 2017. It anticipates an aver- age oil price of $65 per barrel of $65, against $54 in 2017, with an average exchange rate of $1.20 per Euro. ‘In this environment, we want to grow profitably,’ Bock said. ‘We anticipate slightly higher BASF Group sales in 2018, largely as a result of volume growth.’
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