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Interview with Dr. Jürgen Hambrecht, Chairman of BASF

You wanted to make BASF less vulnerable to economic cycles by making acquisitions. Now, the expensive new deals are particularly hard hit by the crisis. Has this strategy failed?
Not at all. The chemical industry is the ultimate cross-sector industry. We supply all the other industries, and naturally we‘re affected by their problems. BASF, with its diversified portfolio, is better positioned in a recession than any other company in the industry. We not only produce chemicals and plastics, we’re also involved in crop protection, nutrition, cosmetics, hygiene, and oil and gas.

But Bayer has long since overtaken BASF on the stock market. The difference in value is now €10 billion.
Bayer has pharmaceuticals first and foremost, and they’re significantly less cyclical. The picture used to be the other way around. We haven’t stopped being ambitious because of that.

Unfortunately, you also acquired Ciba just a few months ago. The Swiss chemical company is a candidate for restructuring.
That’s not true. Two of Ciba’s three lines of business are in excellent shape – plastics additives and pigments. Paper chemistry is a problem for both Ciba and us. We’re merging in order to make the business profitable again after serious restructuring.

You actually signed the contract on the very day that Lehman Brothers filed for bankruptcy.
Of course we saw that coming!

Dr. Jürgen Hambrecht, Chairman of BASF

Since then, the world economy has gone downhill very quickly. At €3.8 billion, Ciba was very expensive even in September. Will you at least try and renegotiate the deal now?
We closed the deal on those terms, and we’ll honor our contract.

Your oil and gas subsidiary was always seen as a support for your business. But there are risks there too. Weren’t you worried that you could run out of natural gas during the recent tussle over gas between Russia and Ukraine?
No. Most of our gas comes via Belarus, much less through Ukraine. Our large natural gas storage facilities provide additional security.

Your Russian business partners have a pretty bad image.
It’s more a problem of perception. As far as Russia is concerned, the media coverage of the conflict was fairer on this occasion. Now, everyone has realized that Ukraine was drawing off some of the gas.

But Russia is using its primary commodities as political leverage.
We’ve always been supplied with gas, even in the most difficult times. Our relationship with Gazprom is an excellent one, and one reason is that our Russian partner owns almost half of the distribution company Wingas. We invested together from the start, including in 1993 – another recession. That’s when the big pipelines were built that we’re benefiting from today.

Agriculture was also always seen as crisis-proof. Now you’re still running into barriers with genetic engineering. You’ve been set back another year with the licensing of the genetically-modified potato Amflora.
That’s an extremely difficult situation. The European Food Safety Authority has already approved Amflora twice, and each time it’s been halted by the Commission. And in the whole area of genetically modified plants, we don’t have a single shred of evidence that any damage or injury is being caused to people or the environment. This has just been confirmed by Nobel laureate Christiane Nüsslein-Volhard. Amflora is really the safest thing you can come up with. Potatoes don’t propagate through pollen, and they don’t fly through the air on their own. If you can’t get that approved, what can you?

BASF has instituted legal proceedings. Why is the biggest chemical company in the world now in dispute with the E.U. Commission over a potato?
Ultimately, the question is, how are we going to feed a population which is going to grow towards nine billion over the next 30 years? Green biotechnology has a very important role to play here.

But Amflora isn’t meant to be eaten. This is about producing industrial starch.
That’s right. But for us, Amflora also opens the door to genetic engineering. I think that what we’re doing in Europe in this area is totally marginal.

What do you mean?
We have it easy in Europe. At present, food shortages play barely any role here. Worldwide, however, 20,000 people die every day from malnutrition, according to the World Health Organization. I think we’re losing respect for the poor people of the world.

And you believe that genetic engineering will solve the problem of hunger?
Another reason is that water is becoming an increasingly scarce resource. 70 per cent of water today is used in agriculture. This is why we need to develop plants that can grow in dry soil and produce higher yields. We can’t do this with conventional crop cultivation alone.

An interview was contained in Germany weekly “Die Zeit" and on the website www.basf.com.


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the world’s leading chemical company; the portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas.