24 March 2003 00:00 [Source: ICB Americas]BASF Corp., the North American division of BASF AG, engineered a turnaround in 2002 with underlying operating income swinging to 74 million versus a loss of 247 million in 2001. Sales increased 2 percent to 7.8 billion on higher petrochemicals revenues.
After solid progress in 2002, BASF Corp. is targeting further improvement in profitability in 2003 through portfolio optimization and cost reductions in a difficult economy.
"In February, we began implementation of a pricing initiative across all key product lines to address unsatisfactory margins that have come about in part because of the dramatic increases and volatility in the cost of raw materials such as crude oil and natural gas, as well as significant increases in transportation and energy costs," says Klaus Peter L"bbe, chairman and CEO of BASF Corp.
A key priority in 2003 will be the integration of Honeywell's engineering plastics business into BASF following the completion of the swap with BASF's nylon fibers business in mid-2003.
"We have to do more to earn a satisfactory return on the substantial investment we have made in our North American operations in recent years, but we are on the correct course and we are beginning to demonstrate tangible results," Mr. L"bbe says.
In 2002, BASF Corp. spent 373 million in capital expenditures, down substantially from 759 million in 2001. For 2003, the company plans to keep capital spending relatively flat at around 380 million, subject to review in the current difficult economy.
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