BASF expands its successful e-commerce activities 08/26/04

BASF expands its successful e-commerce activities 08/26/04
P-04-376


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E-commerce sales of €2.65 billion in the first half of 2004

70 percent increase compared with the same period of 2003

Growth in all operating divisions and regions



BASF is expanding its successful e-commerce activities. In the first half of 2004, the company posted e-commerce sales of approximately €2.65 billion. This corresponds to 17 percent of total sales (excluding the oil and gas business) and a 70 percent increase compared with the same period of 2003. For the full year 2004, BASF is aiming to achieve 20 percent of its annual sales via e-commerce. By comparison, e-commerce accounted for 13 percent of sales (€3.7 billion) in 2003 and 8 percent (€2.3 billion) in 2002.



Integral part of corporate strategy
“E-commerce is an integral part of BASF’s corporate strategy,” said Andrew Pike, head of the competence center Information Services, explaining the company’s formula for success. Pike says that unlike many other companies, BASF did not let itself get carried away by the Internet hype of recent years, and instead continuously developed its e-commerce structures. “In doing so, we benefit from BASF’s excellent overall performance. At the same time, e-commerce has enabled us to streamline and accelerate our processes significantly, making BASF even more efficient in the global competitive environment,” he said.



All operating divisions expand e-commerce activities
In the first half of 2004, all operating divisions have increased e-commerce activities, not just those that are traditionally strong in this area such as Styrenics and Performance Polymers, which already carry out an average of nearly 60 percent of their transactions online. One reason for this is that e-commerce has now become established not only for trading standard products: Increasing numbers of customers for specialties are also now choosing to do business with BASF electronically.

This trend can be seen worldwide. All regions reported higher e-commerce sales in the first half of 2004. At 460 percent, the greatest increase compared with the previous year was seen in Asia, which is also proving to be an engine for global growth in e-commerce. With an increase of 320 percent, e-commerce sales also climbed significantly in South America. In Brazil, for example, BASF further expanded its position as one of the leading e-commerce companies. In May, the business magazine Info Exame published an article titled “The kings of eCommerce in Brazil” in which BASF was ranked number one in the chemical industry. The more mature European and North American economies contribute 52 percent and 27 percent respectively to BASF’s global e-commerce sales. Compared with the previous year’s strong performance, this corresponds to a further increase of 46 percent in Europe and 27 percent in North America.



Customers very satisfied with BASF’s service
BASF’s e-commerce activities extend far beyond simple order processing. “Our e commerce systems help our customers to be more successful,” said Lars Henze, head of global e-commerce at BASF. Customers have online access to a variety of product information, can view safety data sheets or obtain additional help with regard to technical queries. “If, for example, a customer in the plastics processing industry has problems with an injection molding process, we can offer expert advice around the clock,” explained Henze.

The variety of information and advice offered by BASF was particularly positively received by customers in representative surveys held in Europe, North America and Asia in the third quarter of 2003. The company is now working together with its subsidiary BASF IT Services to further expand these services. The aim is to offer customers in a specific industry all those products that could be of interest independent of internal BASF structures. This idea has already been implemented in BASF’s ChemicalPortal, which covers the entire product portfolio of the Inorganics, Petrochemicals, Intermediates, Performance Chemicals and Functional Polymers divisions.



E-commerce increasingly important in purchasing
E-commerce is also becoming increasingly important on the purchasing side. In Germany alone, BASF Aktiengesellschaft now purchases approximately 30 percent of raw materials electronically, and the figure for procurement of technical goods and services is in excess of 50 percent of transactions.

BASF has been enabling its customers and suppliers to process orders electronically since 2001. The Internet service consists of two elements: WorldAccount and Elemica. Elemica is an independent network that was originally founded by 22 companies in the chemical industry and which now incorporates more than 200 firms. It provides an electronic link between the order management systems of customers and suppliers. WorldAccount, BASF’s global e-commerce portal, is available in 11 languages and offers all the company’s products with the exception of oil and gas. Currently, there are about 10,000 registered users in more than 90 countries. The BASF platforms ChemicalPortal and PlasticsPortal are also based on WorldAccount. The subsidiary BASF IT Services provides technical management for BASF’s e-commerce activities and played an important role in establishing WorldAccount.



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