BASF Coatings to invest Euro385m on plant upgrades

29 November 2000 15:34  [Source: ICIS news]

MUNSTER, Germany (CNI)--Germany's BASF Coatings said Wednesday it has secured funding for a capital investment programme worth Euro385m ($323m) from 2001 to 2005.

Klaus-Peter Lobbe, head of BASF's coatings division, revealed at a press conference here that the division is considering investments in:

• A waterborne basecoat plant for automotive OEM (original equipment manufacture) coatings in Spain.
• Expanding capacities for industrial coatings and powder coatings on a worldwide basis.
• Improving productivity at resin production sites in Brazil.

Lobbe said the investments involved upgrading existing facilities and would not include the construction of new plants. He stressed that the Euro385m capital investment programme did not include money for acquisitions.

BASF expects global coatings sales to rise 10% to Euro2.2bn this year compared with 1999. Profitability, however, has been hit by the devaluation of the Brazilian real, leading to a return on sales equal to last year's 10%.

Some 40% of sales this year is expected to come from the automotive OEM coatings business. Automotive refinish coatings are expected to generate 25% of sales, industrial coatings are expected to generate 20% and decorative paints (in South America) are expected to contribute 15%.

About 60% of coatings sales are expected to come from outside Europe, with a 5% contribution from Asia Pacific. Lobbe said the Asia Pacific contribution was "still modest" and stressed that the coatings division would continue to target growth in this region. In particular, he said, BASF wants to be number three in automotive OEM coatings in Japan through its new joint venture with NOF.

In global terms, BASF aims to be number three in automotive coatings and in the top ten in industrial coatings, Lobbe stated.

BASF Coatings is also seeking growth in the core technologies of powder, coil and wood coatings - both through internal growth and acquisitions, he said.

By: Karen Higginbottom, European Chemical News
+44 208 652 3214

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