BASF “leaves the economic crisis behind” and increases sales by 22%

Barcelona (ACN).- The chemical company BASF has recovered the dynamism lost due to the crisis according to the Vice president and Delegate of the Spanish subsidiary, Erwin Rauhe, during the presentation of this year’s results. BASF sales in Spain, the main production of which is in Catalonia, have increased by 22% during the last year. The market’s solid performance was seen at the beginning of the first term in 2011, when company turnover increased by 43% compared to the same period last year. Despite having good “feelings” regarding this year, Rauhe warned that there are uncertainties that could hold the sales back. BASF will invest 30 million euros in Spain, 12 of which are earmarked for the plant in Tarragona. BASF production in Spain is mainly based in Catalonia, with factories in Tarragona,–the biggest plant in Southern Europe– and in towns less than 40km from Barcelona (Castellbisbal, Rubí, Palau-Solità i Plegamans, Barcelona and Hospitalet de Llobregat).

Investments

In spite of the uncertainties that will determine the development of the business throughout the year, BASF wants to invest around 30 million euros in 2011 in Spanish plants. Twelve million will be aimed at various projects to increase productivity in Tarragona, where there is the multinational’s largest plant in Southern Europe. Three million will be used to encourage factories which are now owned by BASF, after the acquisition of another chemical company, Cognis, located in the Zona Franca, on the outskirts of Barcelona, and in Castellbisbal an outlying town close to the Catalan capital.

“The economic crisis is in the past and the year 2011 confirms unmistakably that we have left the crisis behind”, said Vice President Rauhe when justifying this statement with the details of BASF’s activity both worldwide and local. Selling in the local market to third persons during 2010 led to a total of 1,317 million euros, which means a 22% increase over the last financial year. In the first term of 2011 the increase in turnover continued, and even accelerated as sales went from 288 million euros in the first three months in 2010 to 413 million during the same period in 2011.

Rauhe was “very happy” with the results, mainly because all sectors are developing “satisfactorily”, except for those related to building materials. According to him, company business was favoured by the rise of the demand derived from support for economic reactivation during the first six months of the year and of the need for stock reposition.

BASF’s net profit during the 2010 financial year was 4,500 million euros worldwide, while sales reached 63,900 million, 26% more than in 2009.

Perspectives

Rauhe said that after looking at this financial year, both perspectives and “feelings” are good, but he also admitted that there are some uncertainties that can put this steady growth in danger. Nevertheless, company managers should be careful given the uprisings in North Africa, the nuclear crisis in Japan and general economic and political instability.

 “The results will be good until summer” Rauhe stated. “After that, the political situation should help us continue to increase”, he added. In this sense, the executive demanded that Spain finish the reforms it started and to reaffirm its efforts in deficit reduction. They have also asked for greater flexibility and permissiveness in European regulations which affect the chemical industry and which, according to him, are much more restrictive than in emerging countries.

Rauhe also reminded those present that Spain has a lack of infrastructure, mainly regarding railway transport. According to BASF, the competitiveness of Spanish plants is affected because there is no international rail width in Spain and export to central Europe is more difficult and more expensive.