In a resource-constrained world where the need for energy security and lower emissions has bought new perspectives to the business world, opportunities exist for those companies that can lead the way in responding to these challenges. BASF, the world’s leading chemical company has led their sector by significantly changing their sources of material supply to lower carbon whilst keeping an innovation edge over their competitors and maintaining constant growth across the board.

Open about its growth ambitions, BASF clearly defines and shares its challenge for the next decade. It is currently targeting revenues for 2020 of €90 billion, and capital expenditure in the run in to 2015 of over €12.5 billion. The company states how it will do this: ‘we earn a premium on our cost of capital,’ ‘we help our customers to be more successful,’ ‘we form the best team in the industry,’

BASF has done a great job of building a few federating principles around its ambition and role in the world, which it has translated into specific targets and ways of analyzing/filtering innovations so there is a clear line of sight between everything it does and everything it wants to be. Over the years it has developed distinctive capabilities and competencies in foresight, integrated manufacturing and waste management, and highly efficient processes and products

BASF focuses on creating resource-efficient product lines and using integrated production sites characterized by co-location of a large number of individual production lines (producing a specific chemical), which share an interconnected material flow. The incentives for this approach are not only that it is resource efficient but also that it is energy efficient. In addition, the high cost of development establishes a high entry barrier for competitors trying to enter the market for volume chemicals.

In addition to streamlined processes BASF has focused on innovation to help increase efficiency across the board. It has built a whole structure designed to encourage innovation, which looks like the A–Z guide to innovation practices. Its scouting business looks at emerging trends; its ventures group takes stakes in new technologies; its technology platform structure carries out research and applied science in a number of nascent sectors outside the business such as white biotech and nanotechnology; it even has a process to capture any incremental innovation ideas from the shop floor. From transport to herbicides to super absorbents for diapers the company is constantly exploring ways to increase efficiency and, at the same time, decrease environmental impact.


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