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Released November 02, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--After reporting strong third-quarter earnings, chemicals giant BASF SE (Ludwigshafen, Germany) expects "considerable growth" in sales and profits for all of 2017. Industrial Info is tracking more than $6.3 billion in active BASF projects, including about $3.2 billion that are under construction.
At an industrial conference in Toronto, Canada, earlier this year, BASF executives said they expected capital expenditures for 2017-2021 to total 19 billion euro (US$22 billion). Of that amount, 49% was expected to go to projects in Europe, but the next-largest total investment value (22%) was earmarked for North America. For more information, see Industrial Info's June 20, 2017, article -BASF Invests Heavily in U.S. Chemical Projects.
Of the $3.2 billion in projects under construction globally, Industrial Info is tracking $2.1 billion in project activity in in North America--$2.04 billion of which are in the U.S. Of the U.S. investments, Texas has the lion's share, with 13 projects valued at just over $1.2 billion.
Among the largest of the BASF projects underway in Texas is the $1.4 billion ammonia-plant addition at its existing Freeport complex, a 68:32 joint venture (JV) between BASF and Yara International ASA (OSE:YAR) (Oslo, Norway). Construction began in September 2015, with completion expected next year. For more information, see Industrial Info's project report.
BASF also has a planned ethylene-unit debottleneck at its Port Arthur facility--a 60:40 JV between BASF and Total Petrochemicals & Refining USA Incorporated (Houston, Texas). The project is in the market analysis and front-end engineering design (FEED) phase, and would include installation of a new furnace to increase production capacity by an unspecified amount. For more information, see Industrial Info's project report.
The largest project outside the U.S. under construction involving BASF: Subsidiary Wintershall Norge AS' (Stavanger, Norway)$1.25 billion subsea-equipment installation for the Maria Offshore Oil and Gas Field Drilling Program in the North Sea.The development is ahead of schedule and is expected to start up in the first half of 2018. For more information, see Industrial Info's project
Underpinning the slightly upgraded full-year outlook are BASF's revised expectations for global economic and industrial growth. BASF is working on global GDP (gross domestic product) growth of 2.8% in 2017--up from its 2.5% estimate at the half year. The company expects industrial production to advance at a firmer pace--3.1% (against 2.5% at the half year). BASF's euro/dollar exchange-rate projection remains unchanged at $1.10 per euro, as does its average Brent oil price at $50 per barrel.
BASF's third-quarter overall sales stood at 15.3 billion euro (US$ 17.8 billion), a 9% increase from third-quarter 2016. Profits were reported to be 1.3 billion euro (US$1.5 billion), compared with 888 million euro (US$932 million) in the same prior-year quarter. Sales jumped 16% to 1.8 billion euro (US$2.1 billion) in BASF's Chemicals segment alone, as "solid volume growth" was supplemented by "significantly higher sales prices," Chief Executive Kurt Bock said.
Sales in BASF's Chemicals segment jumped 25%, compared to the same quarter in 2016, to about 4 billion euro (US$4.7 billion). The increase was largely due to higher prices in all divisions, monomers in particular. Revenue also was lifted 244 million euro (US$284 million) by Chemetall, the auto and aerospace surface-treatment business BASF acquired in December 2016 from Albemarle Corporation (NYSE:ALB) (Charlotte, North Carolina) for 2.8 billion euro (US$3.2 billion).
BASF's Oil & Gas division posted "a slight decrease" in earnings, while its other units posted "a considerable decline" primarily as a result of higher raw-material prices. Its Agricultural Solutions segment also recorded a 6% decline in sales, to 987 million euro (US$1.2 billion), reflecting "declining prices and volumes in Brazil."
"The positive demand development continued in the third quarter of 2017. We achieved solid volume growth, even compared with the strong prior-year quarter," Bock said in an earnings-related conference call.
Year-over-year, net profit jumped 50% at BASF, underscoring strong margins in an industry that continues to experience a wave of consolidation. BASF's latest announced acquisitions include the 1.6 billion-euro (US$1.9 billion) adiponitrile-based nylon 6,6 business of Solvay SA (Brussels, Belgium) and the 5.9 billion-euro (US$6.9 billion) purchase of seeds and non-selective herbicide businesses from Bayer AG (Leverkusen, Germany).
"In addition to organic growth, acquisitions are a key strategic lever to achieve our targets," Bock said. "We want to acquire businesses which generate profitable growth above the industry average and are innovation-driven."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
At an industrial conference in Toronto, Canada, earlier this year, BASF executives said they expected capital expenditures for 2017-2021 to total 19 billion euro (US$22 billion). Of that amount, 49% was expected to go to projects in Europe, but the next-largest total investment value (22%) was earmarked for North America. For more information, see Industrial Info's June 20, 2017, article -BASF Invests Heavily in U.S. Chemical Projects.
Of the $3.2 billion in projects under construction globally, Industrial Info is tracking $2.1 billion in project activity in in North America--$2.04 billion of which are in the U.S. Of the U.S. investments, Texas has the lion's share, with 13 projects valued at just over $1.2 billion.
Among the largest of the BASF projects underway in Texas is the $1.4 billion ammonia-plant addition at its existing Freeport complex, a 68:32 joint venture (JV) between BASF and Yara International ASA (OSE:YAR) (Oslo, Norway). Construction began in September 2015, with completion expected next year. For more information, see Industrial Info's project report.
BASF also has a planned ethylene-unit debottleneck at its Port Arthur facility--a 60:40 JV between BASF and Total Petrochemicals & Refining USA Incorporated (Houston, Texas). The project is in the market analysis and front-end engineering design (FEED) phase, and would include installation of a new furnace to increase production capacity by an unspecified amount. For more information, see Industrial Info's project report.
The largest project outside the U.S. under construction involving BASF: Subsidiary Wintershall Norge AS' (Stavanger, Norway)$1.25 billion subsea-equipment installation for the Maria Offshore Oil and Gas Field Drilling Program in the North Sea.The development is ahead of schedule and is expected to start up in the first half of 2018. For more information, see Industrial Info's project
Underpinning the slightly upgraded full-year outlook are BASF's revised expectations for global economic and industrial growth. BASF is working on global GDP (gross domestic product) growth of 2.8% in 2017--up from its 2.5% estimate at the half year. The company expects industrial production to advance at a firmer pace--3.1% (against 2.5% at the half year). BASF's euro/dollar exchange-rate projection remains unchanged at $1.10 per euro, as does its average Brent oil price at $50 per barrel.
BASF's third-quarter overall sales stood at 15.3 billion euro (US$ 17.8 billion), a 9% increase from third-quarter 2016. Profits were reported to be 1.3 billion euro (US$1.5 billion), compared with 888 million euro (US$932 million) in the same prior-year quarter. Sales jumped 16% to 1.8 billion euro (US$2.1 billion) in BASF's Chemicals segment alone, as "solid volume growth" was supplemented by "significantly higher sales prices," Chief Executive Kurt Bock said.
Sales in BASF's Chemicals segment jumped 25%, compared to the same quarter in 2016, to about 4 billion euro (US$4.7 billion). The increase was largely due to higher prices in all divisions, monomers in particular. Revenue also was lifted 244 million euro (US$284 million) by Chemetall, the auto and aerospace surface-treatment business BASF acquired in December 2016 from Albemarle Corporation (NYSE:ALB) (Charlotte, North Carolina) for 2.8 billion euro (US$3.2 billion).
BASF's Oil & Gas division posted "a slight decrease" in earnings, while its other units posted "a considerable decline" primarily as a result of higher raw-material prices. Its Agricultural Solutions segment also recorded a 6% decline in sales, to 987 million euro (US$1.2 billion), reflecting "declining prices and volumes in Brazil."
"The positive demand development continued in the third quarter of 2017. We achieved solid volume growth, even compared with the strong prior-year quarter," Bock said in an earnings-related conference call.
Year-over-year, net profit jumped 50% at BASF, underscoring strong margins in an industry that continues to experience a wave of consolidation. BASF's latest announced acquisitions include the 1.6 billion-euro (US$1.9 billion) adiponitrile-based nylon 6,6 business of Solvay SA (Brussels, Belgium) and the 5.9 billion-euro (US$6.9 billion) purchase of seeds and non-selective herbicide businesses from Bayer AG (Leverkusen, Germany).
"In addition to organic growth, acquisitions are a key strategic lever to achieve our targets," Bock said. "We want to acquire businesses which generate profitable growth above the industry average and are innovation-driven."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
