19 July 2002 16:25 [Source: ICIS news]
The apparently smooth senior management transition at BASF says a lot about the company and contrasts with the step changes seen elsewhere in recent years. It highlights too the strength and depth of experience on the BASF Vorstand, or board of executive directors, where board member responsibilities rotate regularly. Over the years, BASF changes a lot but a great deal stays the same.
New chairman Jurgen Hambrecht, who takes over in May next year, brings broad experience to the job. He replaces Jurgen Strube who has been chairman since 1990 and has overseen widespread portfolio change including the aggressive move into oil and natural gas. Hambrecht is officially described as an entrepreneur who has had a great deal to do with BASF’s build up in Asia. But he is also a chemist who has worked for BASF for 26 years and is widely seen within the company as a safe pair of hands. Hambrecht will be backed by Eggert Voscherau as deputy chairman. Voscherau is an executive of standing in European chemicals and currently president of the European chemical industry council (Cefic).
The 2003 annual general meeting (AGM) at BASF will see both Strube and deputy chairman and chief financial officer (CFO), Max Dietrich Kley, retire and move onto the supervisory board, all in all a significant generational change at the top of the company. Both men have been on the BASF board for well over 10 years, (Strube since 1985 and Kley since 1990) and Strube could have stepped down two years ago although the company was determined then to make sure that the strength of the management team was sustained in what were promising to be difficult times. Hambrecht joined the board in 1997 when he was based in Hong Kong as the head of BASF in Asia. He returned to Germany in 1999. Kurt Bock, currently head of logistics and information services, joins the board in January 2003 and from May 2003 replaces Kley as chief financial officer.
Under Strube, and with Kley in position as chief financial officer and latterly deputy chairman, BASF has changed a great deal although the changes have not always been so widely recognised. The BASF portfolio has shifted significantly away from petrochemicals and commodities and more towards specialties (BASF is probably the world’s largest specialty chemicals producer). There have been dramatic moves not only into oil and gas but also in agrochemicals and away from businesses as diverse as pharmaceuticals and fertilisers. The drive into Asia has been significant.
BASF has been good at making important relationships work. In gas it has teamed up with Russian giant Gazprom, in chemicals in Asia with China’s Sinopec and Malaysia with state oil company Petronas. The Basell joint venture with Shell has let the company hold vitally important petrochemicals and polymers assets at arms length.
Strube is proud of the fact that he introduced the word Verbund (loosely translated as integration, although there really is no English equivalent) into the English language. With Verbund, BASF aims to maximise production efficiencies and minimise waste. Under Strube’s leadership the concept has been applied to the new plants in the Far East and BASF has moved on from its largely transatlantic focus towards becoming a much more global company. There has been widespread organisational change.
Indeed, the ‘Fit for the future’ campaign, launched following the profits warning in 2001 and now largely complete, has changed a great deal at BASF. It was designed to open the organisation up, try to encourage entrepreneurship and let the company operate on a global basis but with regional emphasis. Quoted saving targets did not indicate the radical nature of the plans to shake up the organisation and push the use of information technology (IT) harder.
The new structure means that Hambrecht and the new board will be able to do a lot more to reshape BASF, probably to continue to focus on growth in Asia, lift competitiveness in Europe and take advantage of opportunities for growth in the US and elsewhere. Certainly, BASF under his chairmanship is likely to become more focused on what could generally be called specialty or high added value chemical products. A key job will be to integrate the developing concept of sustainability into the Verbund.
It is not surprising that Hambrecht’s appointment has been broadly welcomed by analysts and reported favourably in the press. It largely signals business as usual at BASF but with an edge. BASF needs both as it begins to recover from the downturn and seeks to make most of not inconsiderable opportunities. Hambrecht and his team have many critical choices to make.
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