BASF Investor Day Asia Pacific - Innovation experiences: First-hand information on three exciting innovation projects which will contribute to BASF’s future growth in the region:
coolpure - the concept fridge by BASF, electronic specialties for LCD panels and mobile emission catalysts for Asia Pacific.
Additional info: http://www.basf.com/group/corporate/en/investor-relations/calendar/130605
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BASF Investor Day Asia-Pacific Innovation Experiences
1. Albert Heuser
President
BASF (China)
Company Ltd.
June 07, 2013
Mobile Emissions Catalysts for Asia
Frank Chen
Catalyst Research, Asia Pacific
Investor Day
Asia Pacific
Shanghai, June 5, 2013
2. 2BASF Investor Day Asia Pacific, June 5-6 2013
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.
3. 3BASF Investor Day Asia Pacific, June 5-6 2013
Production of passenger cars and LCVs*
(in million units)
North America
EMEA
Japan
South Korea
Note: ASEAN comprises Indonesia, Thailand, Vietnam, Malaysia, and Philippines;
13
18 23
30
5 5
8
10
Production 2011; Global production 77 million units
Total production in 2020; Global production 122 million units
3.7%
South America
4
7
6.4%
3.0%
China
17
33
7.6%
India
4
1314.0%
2.5%
ASEAN
3
6
8.0%
0%
* Light commercial vehicles
OEM production in emerging markets
will double by 2020
Growth rate p.a.
Other Asian countries <1million units
Source: LMCA
4. 4BASF Investor Day Asia Pacific, June 5-6 2013
Light Duty Heavy Duty Motorcycle
All OEMs face a major compliance
challenge: Emissions reduction
Announced Regulations
Light Duty Heavy Duty Motorcycle
USA
CA LEV III US Tier 3
US 2010 Global, 4a Global, 4b Global 5
US 10
Europe
Euro 5 Phase In Euro 6b Phase In Euro 6c Euro 7
Euro VI Euro VII
Global, 4a Global, 4b Global 5
Phase In Euro 4 Euro 5
Brazil
Euro 5 Euro 6
Euro V Euro VI
Euro 3
Russia
Euro 4 Euro 5 Euro 6
Euro IV Euro V Euro VI
India
Euro 4 Euro 5
Euro IV Euro V
Euro 3
China
Euro 4 Euro 5 Euro 6
Euro IV Euro V
Euro 3
South
Korea
Euro 5 Euro 6
Euro V Euro VI
Global 3 Global 4
Japan Post 2009 P.P Reg
Global, 4a Global, 4b Post 2009
Vietnam Euro 4 Euro 5
Euro 3
Thailand
Euro 4 Euro 5
Euro 4
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Future Regulations
5. 5BASF Investor Day Asia Pacific, June 5-6 2013
80
280
240
200
160
120
202020182016201420102008200620042002
95
164
125
130
229
241
158
143
2012
CO2 targets
(in g/km)
173
186
Fuel efficiency/CO2 targets present
another significant challenge
Source: BCG
6. 6BASF Investor Day Asia Pacific, June 5-6 2013
North America
Japan and Korea
China
India
Europe
South America
BASF – the market leader in Mobile
Emissions Catalysts worldwide
7. 7BASF Investor Day Asia Pacific, June 5-6 2013
Global R&D presence
~€140 million in catalysis
R&D spend in 2012
Focus on product
innovation and aligning
regional capabilities to
local market needs
>650 catalyst experts
globally
Supported by >10,000
scientists in global
Verbund
Key facts
Tokyo, Japan (NE Chemcat)
Seoul, Korea (Heesung)
Shanghai, China
Hannover,
Germany
Ludwigshafen,
Germany
Union & Iselin,
New Jersey
R&D sites
Beachwood,
Ohio
Nienburg, Germany
Guilin, China
Pasadena,
Texas
Huntsville,
Alabama
De Meern, Netherlands
Heidelberg,
Germany
A strong global R&D platform
8. 8BASF Investor Day Asia Pacific, June 5-6 2013
Estimated annual sales of 25 million
passenger cars in China by 2020
BASF is market leader for mobile emissions
catalysts in China
BASF has leading position
among top 5 local OEMs
>20 million catalysts manufactured at
integrated Shanghai emissions catalysts and
R&D hub since 2000
>€65 million invested in Shanghai-based
operations to date
Targeting ~€50 million in incremental
Catalysts division investment in China
through 2016
A decade of progress in China
BASF catalysts site in Shanghai
BASF catalysts site in Shanghai
Strong proximity to the customer
9. 9BASF Investor Day Asia Pacific, June 5-6 2013
Emission reduction standards gain
importance in emerging Asia
– Euro-4 standards have been enacted and
tighter Euro-5 requirements are on the way
Fuel quality in emerging Asia is different
from developed countries
Driving habits in emerging Asia differ from
developed countries
Shorter innovation cycles lead to more
frequent model introductions
Cars in China and India run at much lower
speeds
Emerging Asia presents unique
challenges for mobile emissions catalysts
10. 10BASF Investor Day Asia Pacific, June 5-6 2013
HC (hydrocarbons)
CO (carbon monoxide)
NOx (oxides of nitrogen)
Coating
Base metal oxides +
Platinum/Palladium/
Rhodium
H2O (water)
CO2 (carbon dioxide)
N2 (nitrogen)
Three-Way Catalyst
(TWC)
Structure of Mobile Emissions Catalyst
11. 11BASF Investor Day Asia Pacific, June 5-6 2013
Task
Equip new platform of
small to mid-sized car with
new generation of mobile
emissions catalysts
Engine size: 1.2 liter –
most popular engine size
in Asia
Challenges for BASF
Better performance
Lower cost
Shorter development time
from concept to results
Prestigious development project with a
leading Chinese OEM
12. 12BASF Investor Day Asia Pacific, June 5-6 2013
Shorten development time by using
proprietary aging lab
– Simulate 160,000 km road performance
– Fine tune quickly by local engine
dynamometer facility
Design unique catalyst to achieve better
emissions performance
– Tailor catalyst toward specific engine
requirements
– Minimize precious metal content by
optimizing Pd and Rh distribution
– Use more durable materials
Demonstrate performance and system
durability to customer
BASF leverages its local presence and
R&D strengths in China with local OEM
13. 13BASF Investor Day Asia Pacific, June 5-6 2013
NOx4)NMHC2)THC1) CO/103)
Engineering target
Original EU IV catalyst
100,000 km
Newly developed catalyst
100,000 km
Newly developed catalyst
160,000 km
Performance of newly developed catalyst
vs. original Euro-4 catalyst and engineering target
1) total hydrocarbons 2) non-methane hydrocarbons 3) carbon monoxide 4) nitrogen oxides
BASFʼs innovative Catalystsʼ solutions
provide better performance at lower cost
14. 14BASF Investor Day Asia Pacific, June 5-6 2013
OEM requirements
Better performance
Lower cost
- New BASF catalyst shows better performance than original Euro-4 catalyst
- New BASF catalyst fulfills engineering targets and allows for safety margin
- New BASF catalyst requires less precious metals
- Significant cost saving for OEM
Shorter development time from concept to results
- Using BASFʼs expertise and proprietary aging lab significantly shortened
development time
- From development to demonstration in only eight months instead of 2 years
BASFʼs innovative Catalystsʼ solutions
provide better performance at lower cost
16. Electronic specialties for LCD panels
Jan Sueltemeyer
Dispersions & Pigments Asia Pacific
Investor Day
Asia Pacific
Shanghai, June 5, 2013
17. 2BASF Investor Day Asia Pacific, June 5-6 2013
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.
18. 3BASF Investor Day Asia Pacific, June 5-6 2013
Do you remember? … not too long ago
19. 4BASF Investor Day Asia Pacific, June 5-6 2013
Do you remember? … not too long ago
20. 5BASF Investor Day Asia Pacific, June 5-6 2013
TV trends
LargeSize
100 Hz
200 Hz
Lower power consumption
(green trend)
3D display
Smart TV
Flexible
Tomorrow2008 2010
Slim & light
Cinema
Ultra-high resolution
Conventional TV Internet TV Smart TV
21. 6BASF Investor Day Asia Pacific, June 5-6 2013
LCD* panel market outgrows E&E
industry
0
25
50
75
100
125
150
2005 2010 2015E
61
LCD Panel Market
(in billion US$)
99
121
+7% p.a.
Source: DisplayBank Market Research
LCD panel market is highly
innovation-driven leading to
– new applications
(tablet PCs, smartphones,
3D TVs, etc.)
– shorter innovation cycles
Key requirements for LCD
manufacturers are
– improvement of image
quality
– lowering of energy
consumption
– reduction of production
costs
Key Facts
* LCD: Liquid crystal display
22. 7BASF Investor Day Asia Pacific, June 5-6 2013
The entire LCD industry is located in Asia
Japan
Sharp
JDI
Panasonic
Korea
Samsung
LG
Taiwan
AUO
Innolux
China
BOE
Tianma
CPT
All leading display producers
are located in Korea, Taiwan
and Japan
China is catching up fast
Today, there is no display
production outside of Asia
23. 8BASF Investor Day Asia Pacific, June 5-6 2013
BASFʼs electronics specialties business
for LCD industry managed out of Asia
Taipei
Seoul
Switzerland Tokyo /
Amagasaki
Global Business Management
Marketing / Sales
Country sales team
Product development / R&D
Production
Global business management
steered out of Asia
Main focus on chemicals for
the liquid crystal display
industry
– Pigments for color filters
– Photoinitiators for UV curing
and photolithography
– UV absorbers for light sensitive
components
– Polymerizable liquid crystals for
optical films
Joint work between Europe
and Asia to develop tailor
made innovations for the
Asian market
24. 9BASF Investor Day Asia Pacific, June 5-6 2013
Structure of LCD panels
Backlight unit
Functional films
Liquid
crystal
cell
25. 10BASF Investor Day Asia Pacific, June 5-6 2013
How do LCDs work?
Close-Up of a Pixel
Transparent
electrode
Glass
Liquid crystals
Thin film transistor
Polarizer
Black matrix
Color filter
In LCD screens each pixel is made with three color filters:
Red, Green and Blue
26. 11BASF Investor Day Asia Pacific, June 5-6 2013
How do LCDs work?
Close-Up of a Pixel
Transparent
electrode
Glass
Liquid crystals
Thin film transistor
Polarizer
Black matrix
Color filter
Polarizer
Each color filter is connected to a cell of liquid crystals
to control the amount of light that can pass
27. 12BASF Investor Day Asia Pacific, June 5-6 2013
Better image quality
– Higher contrast ratio (white/black luminescence)
– Improvement in color purity
– Increase of brightness
Lower energy consumption
– Reduction of backlight units through higher transparency of display components
New design opportunities
– Reduction of LCD panel thickness to allow thinner displays
New features
– 3D displays
– High resolution
– Smart TV
Lower production costs
Key demands of LCD producers
28. 13BASF Investor Day Asia Pacific, June 5-6 2013
What is contrast Ratio?
TV set in daylight environmentTV set in a dark room
30. 15BASF Investor Day Asia Pacific, June 5-6 2013
High contrast ratioLow contrast ratio
31. 16BASF Investor Day Asia Pacific, June 5-6 2013
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
1997 2005 2011
Contrast ratio of Irgaphor® red pigments
99
1997
Launch of first Irgaphor® color
filter grade
Applications: mobiles and
monitors
2005
2nd generation Irgaphor® color
filter grade
Applications: TVs, mobiles and
monitors
2011
3rd generation Irgaphor® color
filter grade
Applications: high-end TVs
and tablet PCs
Key Facts
BASFʼs innovative Irgaphor® color
pigments drive huge improvement in
image quality
Contrast ratio
improved by
>5 times
32. 17BASF Investor Day Asia Pacific, June 5-6 2013
LCDs – BASF products in every pixel
Backlight unit
Functional films
Liquid
crystal
cell
Reflective film
Photospacers
Prism sheet
Optical films
Polarizer
Diffusion film
Polarizer
Optical films
Surface finishing
Light source
Glass substrate
Glass substrate
Protective layers
Color filter
Retardation film
BASF solutions for LCDs
Colorants: Irgaphor®
Photoinitiators: Irgacure®
Lightstabilizers: Tinuvin®
Liquid crystals: Paliocolor®
Dispersants: EFKA®
35. 2BASF Investor Day Asia Pacific, June 5-6 2013
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.
36. 3BASF Investor Day Asia Pacific, June 5-6 2013
High-end models*
(%)
Number of units
(million)
*models with 3 doors or side-by-side
78
100
135
57
75
103
0
20
40
60
80
100
120
140
2005 2010 2015e
0%
10%
20%
30%
40%
50%
60%
70%
Sources: Customer information, Euromonitor, BASF estimations
Global Asia-Pacific
Global sales constantly
growing, driven by
– replacement need
– market penetration in
developing countries
Asian market of dominant
importance, reaching regional
share of ~75% until 2015
High-end segment catching up
– 2005 ~8% share
– 2015e ~13% share
Refrigerator sales continue to grow
globally, high-end segment increasing
37. 4BASF Investor Day Asia Pacific, June 5-6 2013
Asia
60%
Polyurethane appliance market 2012
by segment
Consumer
refrigeration
70%
Europe
21%
Other
5 %
Commercial
refrigeration
15%
Americas
19%
Polyurethane appliance market 2012
by region
Water heater
10%
~ 1,800kt ~ 1,800kt
Appliances is a major segment for
polyurethanes, especially in Asia
38. 5BASF Investor Day Asia Pacific, June 5-6 2013
OEMs demand cost conscious, pragmatic innovations from their suppliers
Strive for
economies of scale
Appliance OEMs are striving for cost
leadership AND differentiation potentials
39. 6BASF Investor Day Asia Pacific, June 5-6 2013
Enhance design and feel of the refrigerator
Increase efficiency and weight characteristics
Decrease cost
Increase differentiation
BASF driving value
in the appliance market
40. 7BASF Investor Day Asia Pacific, June 5-6 2013
Elastollan®
LED optical waveguide
Permaskin®
Elastollan®
Shelves
Elastollan®
Gasket
Elastollan®
Soft Touch
Balindur™
Elastopor®H
Elastocool®
Advanced
Elastofoam®I
COLO-FAST®
WST®
1
9
7
3
2
10
8
5
6
4
coolpure 1.1 –
“Ten ways into a cool future”
Technics / nano / bionics / nature
Light / structure / energy
Reduction / monomaterials
Recyclability / sustainability
Product design trends:
41. 8BASF Investor Day Asia Pacific, June 5-6 2013
Processed three-dimensional outer surface
Surface texture of the inside of the door
Back-printed with wood grain
Transparent polyurethane film,
which can be back-printed with
decors
Suitable for complex
geometries
Freedom of design, enabling
mass-customization
Replacement of materials, e.g.
steel
Solvent-free alternative to
conventional paintings
coolpure 1.1 – Permaskin®
42. 9BASF Investor Day Asia Pacific, June 5-6 2013
Bottlerack, strayed lightSwung shelves
New interior look-and-feel
Outstanding resistance,
comparable to glass
Flexibility at low temperatures
combined with high rigidity
Freedom of design,
differentiation
Improved sound insulation
properties
coolpure 1.1 – Elastollan® Shelves
43. 10BASF Investor Day Asia Pacific, June 5-6 2013
Premium quality look-and-feel
(Elastollan® Soft Touch door
handle already successfully
commercialized in automotive
interior applications)
Lightfast and colour-stable
material
High resistance to abrasion
No additional painting required
Lightfast and colour–stable soft touch
coolpure 1.1 – Elastollan® Soft Touch
44. 11BASF Investor Day Asia Pacific, June 5-6 2013
Idea generation
Global project kick-off
Trend
studies
CAD files
Final design
decision
Sneak preview at
B/S/H/ board meeting
Going public at in-house
fair Tianjin, China
HY2 2010 HY1 2011 HY2 2011 HY1 2012 HY2 2012 HY1 2013 …
Innovation workshops
Project milestones and next steps
45. 12BASF Investor Day Asia Pacific, June 5-6 2013
Address customer need to
differentiate via design with
material driven innovation
Enable material substitution
(e.g. steel, glass)
Provide proof-of-concept for
new ways how to enhance
energy efficiency
Workshops with Appliance
OEMs generating very high
interest globally
– Premium access for BASF to
product designers and
marketing
– Joint follow-up projects, value /
solution oriented discussions
BASF speaks the language of the
appliance industry