"BASF is a reliable partner when it comes to achieving success. And behind this strong performance is a strong team," said BASF chairman Jrgen Hambrecht.

He expressed his "heartfelt thanks to all employees for their outstanding commitment." Moreover, he assured the shareholders that the whole BASF team would do its utmost to ensure that it held on to the world cup in chemistry.

To strengthen BASF's position as the world's leading chemical company, the board of executive directors continually improved the portfolio in 2005.

Two businesses were sold: the structurally weak polystyrene business in North America and BASF's stake in the joint venture Basell.

"In return, we acquired a number of customer-oriented, highly innovative businesses," emphasized Hambrecht and named the acquisitions of the electronic chemicals business from Merck and the Swiss fine chemicals manufacturer Orgamol.

"Both of these acquisitions improve our competitive position and open up considerable growth potential worldwide in attractive markets," he said.

In the first quarter of 2006, "we made a further major step by acquiring the construction chemicals business of Degussa AG," said Hambrecht.

And with the acquisition of the highly profitable company Johnson Polymer, "we will further improve our position in the fast-growing coating resins business, supplementing our expertise with innovative technologies and strengthening our market presence in North America," the chairman noted.

BASF is still interested in the planned acquisition of Engelhard Corporation.
The acquisition would make BASF one of the world's leading suppliers in this growth market, which would open up enormous potential for innovations and growth.

Hambrecht singled out two major future-oriented projects: the new Verbund site in Nanjing, in East China's Jiangsu Province, which was opened in September 2005, and the deepening of co-operation with the Russian natural gas company Gazprom.

He said the expansion of BASF's activities in the natural gas business was an important capital expenditures project: "Under the motto 'Gas for Europe,' we want to ensure secure supplies of natural gas to Europe."

Hambrecht defined "innovations for the markets of the future" as the most important topic in terms of maintaining competitiveness over the long term.

This includes BASF's engagement in the five growth clusters: energy management, raw materials change, nanotechnology, plant biotechnology and white (industrial) biotechnology.

In these growth clusters, BASF will invest approximately 800 million euros (US$1.02 billion) worldwide by 2008.

Finally, Hambrecht emphasized that BASF has paved the way for profitable growth in the future by increasing efficiency, improving the portfolio with attractive new businesses and investing in growth markets.

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