BASF Corp. Overview

BASF Corp.

Introduction

 Chemicals, plastics, crop protection products, and performance goods are produced, marketed, and sold by BASF Corp. Solvents, adhesives, surfactants, fuel additives, electronic chemicals, pigments, paints, food additives, fungicides, and herbicides are among the company’s product offerings. Construction, furniture and timber, agriculture, electronics and electrical, paints and coatings, auto parts, residential care, nutrition, chemicals, and other industries are among the many that the company serves. R&D is conducted by BASF in collaboration with international clients, partners, and scientists. A global network of production facilities supports the company’s operations. It is present in North America, South America, Africa, the Middle East, Asia Pacific, and Europe. The headquarters of BASF are in Ludwigshafen, Germany.

Key and Significant Facts

Founding year: the company was founded April 6th 1865.

Industrial Ranking: the company ranked 62nd in the fortune’s global 500 top companies.

Company type: Chemical company

Trading type: the company trades stock as BASF FE.

Workforce strength: the company has a workforce strength of 111,047 employees(ending of 2021).

Set of Experiences

The abbreviation BASF represents Badische Anilin-und Sodafabrik, or “Baden Aniline and Soft drink Manufacturing plant.” On April 6, 1865, Baden-speaking Friedrich Engelhorn established it in Mannheim. In 1861, Engelhorn was in charge of setting up a gasworks and putting road lighting in place for the town board. Engelhorn used the tar that was produced as a byproduct of the gasworks to make dyes. In 1865, BASF was established to manufacture additional chemicals, primarily acids and soda, required for the production of dyes. On the other hand, the chemical plant was built in Ludwigshafen, which is on the other side of the Rhine River. This was done because the town council of Mannheim was worried that the plant’s air pollution could make the locals angry. The dye-making procedures were also relocated to the BASF location in 1866.

Dye

William Henry Perkin discovered in 1857 that powerful coloring agents could be made from aniline. Coal tar’s aniline was used to make synthetic dyes that were sold in England. BASF appointed Heinrich Caro, a German chemist who had previously worked in the English dyestuff industry, as the company’s inaugural head of research. On June 25, 1869, Caro submitted an application for a British patent for his synthetic version of alizarin, a naturally occurring pigment that is found in madder. Perkin filed a nearly identical patent application on June 26, 1869, and the two businesses agreed to trade using the method. The synthesis of eosin and methylene blue received additional patents, and in 1880, research into the production of indigo dye began. However, until 1897, this dye’s commercialization was unsuccessful. In 1901, dyestuffs made up about 80% of BASF’s production.

Soda

Until the Solvay process became available in 1880, which was significantly less expensive, sodium carbonate (also known as soda) was produced using the Leblanc method. The Solvay corporation sold it to BASF after it ceased production.

Sulfuric Acid The lead chamber process was initially utilized for the production of sulfuric acid; however, in 1890, a unit employing the contact process was put into operation. Sulfuric acid was produced by this unit at a lower cost and at a higher concentration (98 percent as opposed to 80 percent). Rudolf Knietsch, who in 1904 was granted the Liebig Award for his broad innovative work, was answerable for this progression.

Ammonia Synthesis of ammonia, a significant industrial chemical that serves as the primary source of nitrogen, was made possible by the Haber process, which was developed between 1908 and 1912. In 1913, BASF opened a new production facility in Oppau and added fertilizers to its product line. In 1917, BASF also purchased anhydrite from Kohnstein and began mining it for gypsum.

IG Farben

At another office in Leuna, where explosives were made during The Second Great War, BASF started activities in 1916. On September 21, 1921, an explosion in Oppau resulted in the deaths of 565 individuals. Oppau was the location of the largest industrial accident in German history. When BASF, along with Hoechst, Bayer, and three other businesses, co-founded IG Farben, it lost its independence under Carl Bosch’s direction. BASF was the apparent survivor because all shares were converted into BASF shares prior to the merger. Rubber, fuels, and coatings were added to the product selection. In 1935, IG Farben and AEG unveiled the magnetophon, the first tape recorder, at the Berlin Radio Exhibition.

Second World War:

Following Adolf Hitler’s appointment as Chancellor in 1933, IG Farben collaborated with the National Socialist government to take advantage of guaranteed volumes and prices and, ultimately, the use of slave labor in government-run concentration camps. The “IG Auschwitz” chemical factory was the world’s largest when it was constructed in Auschwitz by BASF, head of IG Farben’ chemical division. It had a surface area of 24 km2, a width of 3 km, and a length of 8 km. IG Farben, an organization that acquired reputation for creating Zyklon-B, the deadly gas that was utilized to kill detainees in Nazi Germany’s elimination camps during the Holocaust, delivered it.

After being nearly completely destroyed during World War II, the location in Ludwigshafen was rebuilt. In November 1945, the Allies dissolved IG Farben.

Because the German military needed a lot of the goods produced there (like gasoline and synthetic rubber), Oppau and Ludwigshafen were important strategically for the war. They became a frequent target of airstrikes as a result. Throughout the conflict, Unified aircraft repeatedly attacked the plants.

Saturation bombing, which began in the fall of 1943, resulted in significant damage. By the end of 1944, production had practically stopped.

Women had to be conscripted because there weren’t enough men working in factories during the war; Later, they were joined by foreign civilians and prisoners of war. Workers from death camps were not employed at the Ludwigshafen or Oppau plants.

The American military government took control of all IG Farben assets in July 1945. The Allied Commission decided that IG Farben should be dissolved in the same year. French authorities were in charge of Ludwigshafen and Oppau.

Revival of the business

On July 28, 1948, an explosion at a BASF facility in Ludwigshafen killed 207 people and injured 3818. Carl Wurster, a former member of the Nazi Party who later held the position of Wehrwirtschaftsführer in Nazi Germany, was instrumental in the 1952 reorganization of BASF under its current name. The German economic miracle of the 1950s led BASF to include synthetics like nylon in its product line. Polystyrene was developed by BASF in the 1930s, and Styropor was developed in 1951.

Manufacturing abroad

 In the 1960s, factories were constructed in Argentina, Australia, Belgium, Brazil, France, Italy, Japan, Mexico, Spain, the United Kingdom, the United States, and other nations. After a change in corporate strategy in 1965, higher-value products like coatings, medications, pesticides, and fertilizers received more attention. Following the unification of Germany, BASF purchased a location in Schwarzheide, Eastern Germany, on October 25, 1990. It made it to Podolsk in Russia in 2012, and Kazan in 2013.

The company announced the beginning of a $10 billion investment project in Zhanjiang, China, in November 2019. This Verbund facility is intended to produce TPU and engineering plastics. After Ludwigshafen, Germany, and Antwerp, Belgium, the facility will be the third-largest of all BASF facilities when it opens in 2022.

Acquisitions

 In 1968, the German coatings company Herbol was purchased by BASF and Bayer AG. In 1970, BASF completely acquired the Cologne and Würzburg Herbol facilities. The trademark was renewed and expanded under new management. In 1997, following a significant reorganization and a coatings industry that was becoming increasingly globalized, Herbol joined Deco GmbH.

In the early 1970s, BASF made a purchase of the Wyandotte Chemical Company and its chemical plant in Geismar, Louisiana. Antifreeze, herbicides, and plastics were produced at the facility. Soon after reducing or eliminating union membership in several other US plants, BASF attempted to operate union-free. After challenging the union, Geismar OCAW members were locked out of their jobs from 1984 to 1989 as a result of a labor dispute.

In support of the American strikers, a Ludwigshafen worker solidarity committee organized rallies and publicity. The German workers at the headquarters of BASF in Ludwigshafen gave the strikers money. The controversy was the focus of a research project. The union also revealed significant unintentional releases of toxic gases like phosgene and toluene, which were made public by the local media and the film Out of Control. A court invalidated BASF’s $66,700 fine for five environmental violations because it was “too small.”

AkzoNobel acquired BASF’s European Coatings division in 1999. The Engelhard Corporation was acquired by BASF in 2006 for $4.8 billion. Johnson Polymer and Degussa’s construction chemicals division were two additional acquisitions in 2006.

On July 1, 2006, the purchase of Johnson Polymer was completed. In cash and without debt, the purchase cost $470 million. It increased BASF’s market presence, particularly in North America, and provided the company with a selection of water-based resins to complement its portfolio of high solids and UV resins for the coatings and paints industry.

Degussa AG’s construction chemicals division was acquired in 2006. Equity acquisition cost approximately €2.2 billion. A €500 million obligation was also added to the exchange.

In September 2008, the company decided to acquire Ciba, which was previously a part of Ciba-Geigy.

 The European Competition Commissioner looked into the deal that was proposed. The acquisition was completed in its entirety on April 9, 2009.

On December 19, 2008, the US company Whitmire Micro-Gen and the British company Sorex Ltd., which produces chemical and non-chemical pest control products under the brand name Sorex, were both acquired by BASF. Sorex was put up for sale in March 2007 for about £100 million.

In December 2010, BASF successfully completed its acquisition of Cognis.

In May 2015, Swiss pharmaceutical company Siegfried Holding and German chemical company BASF agreed to sell a portion of the pharmaceutical ingredients business for €270 million, including assumed debt.

As part of its acquisition of Monsanto, BASF announced in October 2017 that it would pay €5.9 billion, or $7 billion, to Bayer to acquire its seed and herbicide businesses.

In August 2019, BASF and DIC, a Japanese manufacturer of fine chemicals, came to an agreement to sell DIC their global pigments business for €1.15 billion ($1.28 billion) in cash and on terms that did not include debt.

DuPont Safety & Construction, a DuPont Co. subsidiary business unit, will acquire BASF and Inge GmbH’s ultrafiltration membrane business in September 2019. Executives at BASF claim that Inge GmbH’s products and strategy better complement DuPont.

Segments

Markets in which BASF is active are numerous. Some of these markets are:

• Chemicals,
• Plastics,
• Performance Products
• Functional Solutions,
• Agricultural Solutions,
•  Oil and Gas

Dicamba Litigation

On January 27, 2020, a peach farmer in Cape Girardeau, Missouri, filed the first legal action involving products containing dicamba. He claimed that herbicides containing dicamba seriously damaged his crops and trees.

Furthermore, it was submitted in November 2016, when Dicamba was still owned by Monsanto. The jury in the case reached a verdict on February 14, 2020, in favor of Bader Farms owner and peach grower Bill Bader and against BASF and its co-defendant Bayer, which had acquired Monsanto and its products. In addition, Bader was ordered to pay BASF and Bayer $15 million in damages. On February 15, 2020, an additional $250 million in punitive damages were ordered to be paid by BASF and Monsanto.

Financials

For the fiscal year 2017, BASF reported earnings of EUR 6.1 billion and annual revenues of EUR 64.5 billion—an increase of 12% over the previous year. The market capitalization of BASF was estimated to be $63.7 billion in November 2018. Over €69 per BASF share was being traded. For the three months of July to September, BASF reported a 24% decrease in operating income and a €1.1 billion ($1.2 billion) decrease in EBIT earnings in October 2019. The US-China trade war and Brexit uncertainty were mentioned as contributing factors. The overall profit for the third quarter was higher than anticipated, despite the fact that the trade war was partially mitigated by the acquisition of the agrochemical and seed businesses owned by Bayer AG.