TBY talks to Florian Krueckl, Managing Director of BASF Central Asia, on the different business lines his company is pursuing in Kazakhstan, and the potential he sees in both agriculture and construction.
TBY How have BASF’s operations evolved in Kazakhstan?
FLORIAN KRUECKL BASF is the world’s leading chemical company, and considers itself the chemical company. BASF launched its business in Kazakhstan in 1992 in the agro-chemical industry by supplying crop-protection agents. The acquisition of a local construction chemical manufacturer gave a powerful boost to BASF’s expansion in Kazakhstan by providing a basis for establishing a multi-purpose company that now offers the entire range of BASF products and services in Central Asia. Globally, its portfolio ranges from chemicals, plastics, performance products, and agricultural products to oil and gas. As a reliable partner, BASF creates chemistry to help its customers in virtually all industries to be more successful. With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges such as climate protection, energy efficiency, nutrition, and mobility. The year 2011 has been designated as the International Year of Chemistry (IYC) by the United Nations, and BASF is supporting the initiative in many different ways. I think BASF’s strongest point is its excellent team, which really contributes to the company’s success. At present, we are promoting projects in new sectors, particularly in the petrochemical and mining sectors, as well as heat insulation designs in the construction industry. These projects fit in a perfect manner to the country’s diversification plans as well as to the aim of investing in climate protection. Today, with the focus on farmers and their needs, BASF wants to become a key player in the agricultural industry.
BASF has a wide product portfolio. For which products do you have biggest demand?
There is competition in all segments of our business, and it is a great motivation to perform our work better than others. It is in the construction chemicals and crop protection product areas that we see the most demand. We have two production sites in Almaty and Astana where we manufacture concrete admixture and dry mix additives. Nearly 80% of all construction chemical materials sold are produced locally. BASF supplies a wide range of crop protection products to Kazakhstan, and we focus our business on crops like wheat, oilseed rape, and fruits with fungicides, herbicides, and insecticides. We conduct our business in accordance with the principles of sustainable development and responsible care.
What BASF innovations have contributed to the advancement of Kazakhstan’s industrial base?
First of all, BASF focuses on innovative technologies. In 2010, BASF’s R&D expenditure reached a new record level, rising to nearly €1.5 billion. Basically, all of our products have an innovative component, such as Neopor. Neopor insulates using air and graphite. With Neopor, BASF provides an insulating material that offers significantly better thermal insulation than other products that are currently available. For example, the new product can achieve the same insulating performance as BASF’s classic Styropor, with up to 50% less raw materials used. For construction chemicals, BASF has developed a new “Crystal Speed Hardening” concept for contractors and precast producers, which increases productivity and quality in concrete production. It also helps to save time and has a positive impact on energy efficiency, offering an attractive overall cost saving potential. We are additionally a primary producer of acrylic dispersions for the paint and varnish industry.
I also would like to mention our innovative solutions for crop protection. Using the Clearfield Production System (CPS) farmers can protect crops such as oilseed rape, corn, wheat, or rice from weeds for the entire growing season. The system is a combination of herbicides and seeds that are tolerant to these herbicides. The seeds are obtained using traditional breeding methods and don’t use genetic engineering. The herbicide acts when it comes into direct contact with weeds, and a single application prevents weeds from germinating again throughout the entire growing season. With CPS, BASF has improved its competitiveness in the market for herbicide-tolerant systems—one of the fastest growing segments of the agricultural market. Another big field of interest in Kazakhstan is the oil, gas, and mining industry. BASF supplies a wide range of gas treatment technologies based on amines solutions for the purification of associated gases and liquid natural gases to the Kazakhstani oil and gas market. BASF makes every effort to ensure its customers have access to all innovative BASF products.
How have your operations been affected by the recent economic downturn?
The financial year 2010 was both eventful and successful. We took advantage of the strong economic upturn, and the result was record sales and solid earnings. We formed the best team in the industry. At the same time, we put BASF on the right track for our future success. Thanks to our acquisitions of Ciba and Cognis, as well as our innovations in future markets, we are becoming even stronger. We are therefore approaching the growing challenges of the future with confidence. This offers benefits for customers, suppliers, employees, shareholders, and the public. All in all we are satisfied with our development. Nevertheless, to be the leading chemical company in the future, we certainly have to make all possible efforts.
What is your outlook for 2011 and beyond?
I am convinced that the government will be able to achieve its strategic and macroeconomic objectives set for this year. All these aspects together will contribute to an overall stabilization of the economy and create high interest in real investors in order to develop projects here in Kazakhstan. According to current knowledge, we do not predict a further downturn in the economy within Kazakhstan. All indicators are showing a stable positive trend. However, we are also prepared for worst-case scenarios.
© The Business Year