BASF chief technology officer Martin Brudermuller took over Kurt Bock as CEO fo the Germany-headquartered chemicals major on Friday.
Bock presented Brudermuller with a 3D-printed model of a storage tank at the company’s annual general meeting (AGM).
In his final speech as CEO, Bock noted that BASF hopes to produce a financial result broadly on par with the banner profits generated in 2017, but noted that global volatility is continuing to build despite the strong economic momentum in Europe since late last year.
“The global challenges are growing… When you look at the newspapers you can see that since last year things have not become easier, neither in Germany, in Europe or in the rest of the world,” he said.
“Who would have thought one year ago that the new government in Germany would only now be starting its work, that tensions in Europe would increase further and that a trade war is no longer a terrible [dream]?,” he added.
Bock, who has been BASF’s CEO since 2011, noted that the company had provided a 10.3% annual return for investors between 2007 and 2017, beating the MSCI World Chemicals Index average of 6.8%.
He responded to critics that have attacked the company for ramping up investment in crop protection and moving away from oil and gas.
“Some people claim we are slaughtering BASF’s alleged sacred cows,” he said.
The company intends to invest €7.6bn in the acquisition of the portfolio of agricultural chemical assets Bayer is to divest in its bid to acquire Monsanto, and is folding its Wintershall oil and gas assets into a joint venture with a view to taking it public and cutting its stake in the mid-term.
Crop protection and seeds treatment, rather than the production or sale of actual seeds, fit into BASF’s core strategy of chemistry innovation and research, according to Bock.
Oil and gas has remained an important part of the company’s business since its acquisition of Wintershall in 1969, Bock said, but has become less central over time, accounting for 28% of earnings before interest and taxes (EBIT) pre-special items in 2012 compared to 12% in 2017.
“To put it plainly, BASF does not need an oil and gas business to be a successful chemical company,” he added.
Bock singled out Europe’s fractious relationship with Russia and the implications for fuel supply, a lack of reliance on “fact-based” approaches to policy by lawmakers, and unrealistic goals to decarbonise Germany and the EU as some of the key obstacles for the future.
“We are optimistic about the future, [but] it would be helpful if politicians would allow us to rely on them,” he said.
Bock’s handover to Brudermuller comes as BASF reported a slight dip in first-quarter net income year on year to €1.68bn as a result of a stronger sales in higher-tax jurisdictions and foreign exchange impact, despite strong gains for chemicals and oil and gas operations.
By Tom Brown
Source: ICIS News
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