BASF in South America Report 2018

BASF in
South America
Report 2018
We strengthen our passion for

our customers through all
of our employees
Keys facts 2018 Keys facts 2018
Key facts 2018
One of the top three

global market positions
90,000+ customers 31
82%
in around of waste
75%
in the world and awards in South America
that recognize our recycled
of the business areas
70,000 efforts in innovation in Brazil
suppliers and sustainability
in which BASF is active
21.6 thousand
€3,321 €62,675 proportion of sales from
Accelerator products.
60 energy efficient initiatives
reduced (CO2eq) by MWh/year
reduction in
million million 27.7% Accelerator solutions make
3,500 internal primary
in sales by location a substantial sustainability energy consumption
of customer in sales for the contribution in the value chain
metric tons/year
BASF Group Brazil
in South America
and a reduction of
€2.0 billion
BASF Group
investments in
SIPAT had
12,000 118
projects
€2.8 6.9
TripleE: thousand
research and
development participations in the five locations, million tons
in South America allow for a savings of of CO2 equivalent
per year
410,000 3 Shared AgroStart program Mata Viva®:

33,500
people
impacted by the strategy
Value Projects
in execution in Argentina,
340
received more than
start-up registrations
278,000
trees planted in Guaratinguetá
tons of CO2 removed
Brazil, Chile, Peru from the atmosphere
of social engagement and Uruguay with innovative agronomic since 1984
in South America (2016-2018) projects (until August 2018)
Around
122,000 6,180
employees employees in
worldwide South America
A reduction of
55%
Including Wintershall employees
Water
consumption
2.8 (total)
in Brazil in water consumption per ton produced
million in South America (2002/2018)
m3/year
30.1% women employed
in South America
women in leadership
roles in South America1 28.9%
1
Excluding employees of the business acquired
from Bayer
Index
Index
About this Report 04
Welcome 05
BASF Group at a glance 2018 06
The BASF Group 07
BASF on the Capital Market 09
BASF in South America 18
Corporate Governance 24
Business Development 26
Sustainability Along the Value Chain 32
Our contribution to the SDGs 44
Environmental Protection, Health and Safety 47
Employees 54
Ten Year Overview — BASF Global 58
Additional information 59
About this Report

The “BASF in South America” Report is published annually as a
concise document on the performance of our activities in the three
dimensions of sustainability — economy, environment and society
— in South America.
The reference period for this publication is the fiscal year 2018. This
report also provides an overview of the BASF Group, together with
its financial performance, prepared in accordance with the
requirements of the International Financial Reporting Standards
(IFRS) and, where applicable, the German Commercial Code as well
as the German Accounting Standards (DRSC). Emissions, waste,
We create chemistry for
energy and water use from consolidated joint operations are
included, based proportionally on our participation. The number of
a sustainable future
employees refer to employees employed by the BASF Group as of
December 31, 2018. We combine productivity and sustainability. This is how we
create chemistry for a sustainable future and contribute to a
Material topics along the value chain, which we identified in internal world that offers more quality of life for everyone.
strategic discussion processes, ongoing global data analysis and This is the way we found to translate what we seek with our
dialog with shareholders, form the focal points of reporting and work, every day. Our AND Way.
define the limits of this Report.
For more information on our selection of sustainability topics, see from page 36 onwards and
basf.com/materiality
4 BASF in South America Report 2018

Welcome/A Message from the President
Welcome
A Message from the President
We live our purpose every day: “We create chemistry for a sustainable
future”. We are constantly evolving with our commitment to positively
impact our entire value chain as well as society. In this report you will
get to know how our journey went in 2018.
We create chemistry for relationships which in turn creates value for

the business, the brand and society and contributes to the success
of our customers, with the development — together — of cost-
effective and responsible solutions. We value diversity to drive
innovation.
In 2018, our sales to customers in South America amounted to

€3,321 million, which represents an increase of 5% compared to the
previous year.
Innovation and sustainability are key pillars of our strategy, particularly

contributing to three global challenges: resources, environment and
climate; food and nutrition; and quality of life. We are constantly
providing tangible examples of our performance, such as ecovio®, a
compostable and biodegradable plastic; the Espaço ECO Foundation
(FEE), which transforms sustainability into concrete indicators for the
market; and the Mata Viva® program: since its implementation it has
been possible to quantify a stock of 33,500 tons of carbon in the
forest. If this element was present the atmosphere, there would be
huge impacts on human health, agriculture and urban infrastructure
generated.
In 2018, we also made progress in bringing contributions to

agribusiness with our effective entry into the market fat seeds for
soybeans, cotton, canola, vegetables and fruits, reinforcing South
America’s importance in world food production. “With creativity, we broke
With responsibility, we set bold sustainability goals while keeping the
paradigms and showed
long-term development in mind. We are aiming for CO2 neutral
growth until 2030, keeping our greenhouse gas emissions flat at the
how digitization brings
2018 level; to increase sales of products that make a substantial
sustainability contribution in the value chain up to €22 billion in 2025;
us closer to our
and pioneered a circular economy project for the chemical recycling customers.”
of plastic waste.
In addition to this, last year we took great strides towards digital

transformation and we are even more open to the market and closer Manfredo Rübens
to our customers: in all segments, sizes and regions. BASF President for South America
As you will see in this report, everything we do is consistent with the

knowledge acquired at BASF over the last 150 years and the
entrepreneurship to create the future. This is our AND Way. We are
sustainable and efficient; responsible and productive. Therefore, we
are optimistic about the future.
BASF in South America Report 2018 5

BASF Group 2018 at a glance
BASF Group 2018 Segment data

at a glance
Key data
2018 2017 + / –
Chemicals million €
Sales1 million € 62,675 61,223 2.4%
EBITDA before special items1 million € 9,481 10,738 (11.7%) Sales 2018 | 16,501
2017 | 16,331
EBITDA1 million € 9,166 10,765 (14.9%)
EBIT before special items1 million € 6,353 7,645 (16.9%) EBIT before 2018 | 3,386
special items 2017 | 4,233
EBIT1
million € 6,033 7,587 (20.5%)
EBIT after cost of capital1 million € 825 2,902 (71.6%)
Net income million € 4,707 6,078 (22.6%)
Earnings per share € 5.12 6.62 (22.7%)
Assets million € 86,556 78,768 9.9%
Investments including
10,735 4,364 146.0%
acquisitions2 million €
2018 2017 + / – Performance Products million €
Employees at year-end 122,404 115,490 6.0%

Sales 2018 | 15,812
Personnel expenses million € 10,659 10,610 0.5% 2017 | 16,217
Research and development EBIT before 2018 | 1,376

2,028 1,843 10.0%
expenses1 million € special items 2017 | 1,416
Greenhouse gas million metric tons
21.8 22.6 (3.5%)
emissions of CO 2 equivalents
Energy efficiency in kilogram of sales

602 625 (3.7%)
production processes product/MWh
Investments in environmental
277 234 18.4%
protection million €
Number of on-site sustainability

100 120 (16.7%)
audits of raw material suppliers
Functional Materials & Solutions million €
Sales 2018 | 21,435

2017 | 20,745
EBIT before 2018 | 1,307

special items 2017 | 1,617
Agricultural Solutions million €
Sales 2018 | 6,156

2017 | 5,696
1 F
igures for 2017 were restated with the presentation of the oil and gas activities as discontinued operations.
For more information, see basf.com/report EBIT before 2018 | 734
2 Additions to intangible assets and property, plant and equipment special items 2017 | 1,033
6
The BASF Group
The BASF Group Business processes such as the procurement of raw materials and
services, production and transport to customers are the shared res-
ponsibility of the divisions and the functional units.
At BASF, we create chemistry for a sustainable future. We
combine economic success with environmental protection New organization of the BASF Group as of January 1, 2019
and social responsibility. The approximately 122,000 em-
ployees in the BASF Group work on contributing to the suc- As of January 1, 2019, we have 12 divisions grouped into six
cess of our customers in nearly all sectors and almost every segments as follows:
country in the world. Until December 31, 2018, our portfolio Chemicals: Petrochemicals and Intermediates
was arranged into four segments: Chemicals, Performance Materials: Performance Materials and Monomers
Products, Functional Materials & Solutions and Agricultural Industrial Solutions: Dispersions & Pigments and
Solutions.1 Since January 1, 2019, BASF’s activities have been Performance Chemicals
grouped into six segments: Chemicals, Materials, Industrial Surface Technologies: Catalysts, Coatings and
Solutions, Surface Technologies, Nutrition & Care and Agri- Construction Chemicals
cultural Solutions. Nutrition & Care: Care Chemicals and Nutrition & Health
Agricultural Solutions: Agricultural Solutions
Organization of the BASF Group until December 31, 2018
We are considering the possibility of merging our construction
Twelve divisions grouped into four segments chemicals business with a strong partner, as well as the option of
Regional divisions, functional units and corporate and divesting this business. The outcome of this review is open. The
research units support our business Construction Chemicals division will be reported under the Surface
Technologies segment until signing of a transaction agreement.
Until December 31, 2018, our 12 divisions1 were grouped into four
segments based on their business models: Chemicals, Performance BASF’s new segment structure will allow a more differentiated steering
Products, Functional Materials & Solutions and Agricultural Solutions. of our businesses according to their market-specific competitive
On September 27, 2018, BASF and Letter One signed a definitive environment. It will increase transparency regarding the results of our
agreement to merge their oil and gas businesses in a joint venture. segments and divisions and highlight the importance of the Verbund
The new joint venture will operate under the name Wintershall DEA. and value chains to our business success. BASF aims to clearly
Since the agreement was signed, we have no longer reported on position its businesses against their relevant competitors and esta-
BASF’s oil and gas business as a separate Oil & Gas segment. Until blish a high-performance organization to enable BASF to be succes-
closing, its earnings will be presented as a separate item, income sful in an increasingly competitive market environment.
after taxes from discontinued operations. Closing of the transaction is
expected in the first half of 2019, subject to the approvals of merger The Chemicals segment will remain the cornerstone of our Verbund
control and foreign investment authorities as well as mining authorities structure. It supplies the other segments with basic chemicals and
and the German Federal Network Agency. In the Agricultural Solutions intermediates, contributing to the organic growth of our key value
segment, we renamed the division from Crop Protection to Agricultural chains. Alongside internal accounts, our customers include the chemical
Solutions after the acquisition of significant businesses from Bayer and plastics industries. We aim to increase our competitiveness through
was closed in August 2018, especially for seeds. technological leadership and operational excellence.
Our divisions bear operational responsibility and are organized according The Materials segment’s portfolio comprises advanced materials and
to sectors or products. They manage our 54 global and regional business their precursors for new applications and systems. These include
units and develop strategies for the 86 strategic business units.1 isocyanates and polyamides as well as inorganic basic products and
specialties for the plastics and plastics processing industries. We aim to
Our regional units are responsible for optimizing local infrastructure, and grow organically through differentiation via specific technological
contribute to tapping our market potential. For financial reporting expertise, industry know-how and customer proximity to maximize value
purposes, we have organized the regional divisions into four regions: in the isocyanate and polyamide value chains.
Europe; North America; Asia Pacific; South America, Africa, Middle East.
The Industrial Solutions segment develops and markets ingredients
Seven functional units and eight corporate units support the BASF and additives for industrial applications such as polymer dispersions,
Group’s business activities. The functional and corporate units pro- pigments, resins, electronic materials, antioxidants and admixtures. We
vide services in areas such as finance, human resources, engineering aim to drive organic growth in key industries such as automotive, plastics
and site management, environmental protection, health and safety, or electronics and expand our position in value-enhancing ingredients
investor relations, and communications. Our global research units and solutions by leveraging our comprehensive industry expertise and
safeguard our innovative capacity and competitiveness. application know-how.
1 E xcluding the oil and gas activities presented as discontinued operations

The BASF Group
The Surface Technologies segment comprises our businesses that We also make use of the intelligent Verbund principle for more than
offer chemical solutions on and for surfaces. Its portfolio includes production, applying it for technologies, the market and digitalization
coatings, rust protection products, catalysts and battery materials for as well. Expert knowledge is pooled in our global research platforms.
the automotive and chemical industries. The aim is to drive organic
growth by leveraging our portfolio of technologies and know-how, and Procurement and sales markets
to establish BASF as a leading and innovative provider of battery
materials as well. Over 90,000 customers; broad customer portfolio
More than 70,000 suppliers
In the Nutrition & Care segment, we strive to expand our position
as a leading provider of nutrition and care ingredients for consumer BASF supplies products and services to over 90,000 customers1
products in the area of nutrition, home and personal care. Customers from various sectors in almost every country in the world. Our
include food and feed producers as well as the pharmaceutical, customer portfolio ranges from major global customers and medium-
cosmetics, detergent and cleaner industries. We aim to enhance and sized businesses to end consumers.
broaden our product and technology portfolio. Our goal is to drive
organic growth by focusing on emerging markets, new business mo- We work with over 70,000 Tier 1 suppliers from different sectors
dels and sustainability trends in consumer markets, supported by worldwide. They supply us with important raw materials, chemicals,
targeted acquisitions. investment goods and consumables, and perform a range of
services. Some of our most important raw materials are naphtha,
The Agricultural Solutions segment aims to further strengthen our natural gas, methanol, ammonia and benzene.
market position as an integrated provider of crop protection products
and seeds. Its portfolio comprises fungicides, herbicides, insecticides Business and competitive environment
and biological crop protection products, as well as seeds and seed
treatment products. We also offer farmers digital solutions combined BASF’s global presence means that it operates in the context of
with practical advice. Our main focus is on innovation- driven organic local, regional and global developments and is bound by various
growth, targeted portfolio expansion as well as leveraging synergies conditions. These include:
from the acquired businesses. – Global economic environment
– Legal and political requirements (such as European Union regula-
In addition, BASF will embed business-critical parts of its functional units tions)
– such as engineering services, procurement and logistics – into the – International trade agreements
divisions to bring its employees closer to its customers and improve – Industry standards
customer-specific agility. We will create leaner structures in our functio- – Environmental agreements (such as the E.U. Emissions Trading
nal units, research and development and in governance functions. System)
– Social aspects (such as the U.N. Universal Declaration of Human
Sites and Verbund Rights)
Six Verbund sites with intelligent plant networking BASF holds one of the top three market positions in around 75% of
355 additional production sites worldwide the business areas in which it is active. Our most important global
competitors include Arkema, Clariant, Covestro, DowDuPont, DSM,
BASF has companies in more than 90 countries. We operate six Evonik, Formosa Plastics, Huntsman, Lanxess, SABIC, Sinopec,
Verbund sites and 355 additional production sites worldwide. Our Solvay, Wanhua and many hundreds of local and regional competi-
Verbund site in Ludwigshafen, Germany, is the world’s largest tors. We expect competitors from Asia and the Middle East in parti-
chemical complex owned by a single company that was developed cular to gain increasing significance in the years ahead.
as an integrated network. This was where the Verbund principle was
originally established and continuously optimized before being Corporate legal structure
implemented at additional sites.
As the publicly traded parent company, BASF SE takes a central
The Verbund system is one of BASF’s great strengths. We add value position: Directly or indirectly, it holds the shares in the companies
by using our resources efficiently. The Production Verbund intelli- belonging to the BASF Group, and is also the largest operating
gently links production units and their energy supply so that, for company. The majority of Group companies cover a broad spectrum
example, the waste heat of one plant provides energy to others. of our business. In the BASF Group Consolidated Financial
Furthermore, one facility’s by-products can serve as feedstock Statements, 323 companies including BASF SE are fully consolidated.
elsewhere. This not only saves us raw materials and energy, it also We consolidate eight joint operations on a proportional basis, and
avoids emissions, lowers logistics costs and leverages synergies. account for 35 companies using the equity method.
1 The method used to calculate customers in the previous year has been adjusted to “sold-to” parties of our consolidated companies. The updated figure for 2017 is over 80,000 customers.

The BASF Group The BASF Group
Goal Achievement in 2018 Employees
2020 goal Status at end of 2018 SDGs

We carry out our corporate purpose, “We create chemistry for a sustainable future,” by pursuing ambitious goals along our entire value Proportion of women in leadership positions 22 – 24 % 21.7 % 5, 16
chain. In this way, we aim to achieve profitable growth and take on social and environmental responsibility. This also helps to achieve with disciplinary responsibility
the United Nations’ Sustainable Development Goals (SDGs).1 We are focusing on issues where we as a company can make a significant Long-term goals
contribution, such as sustainable consumption and production, climate protection or fighting hunger. International representation among senior Increase in proportion of non-German senior 40.4%
executives 5 executives (baseline 2003: 30%)
Senior executives with international experience Proportion of senior executives with interna- 85.4%
Goal areas along the value chain tional experience over 80%
5 T
he term “senior executives” refers to leadership levels 1 to 4, whereby level 1 denotes the Board of Executive Directors. In addition, individual employees can attain senior executive status
by virtue of special expertise.
SUPPLIERS BASF CUSTOMERS
Procurement Growth and profitability; Products and solutions Safety in production

employees; safety in produc- Status at
tion; product stewardship; 2025 goal end of 2018 SDGs
energy and climate protection; Reduction of the global index of accidents with sick leave per 200,000 hours worked ≤ 0.1 0.3 3, 8
water
Reduction of worldwide process safety incidents per 200,000 hours worked ≤ 0.1 0.3 3, 12, 15
Annual goal
Health Performance Index > 0.9 0.96 3, 8
Procurement
Status at
Product stewardship
2020 goal end of 2018 SDGs
Status at
Assessment of sustainability performance of relevant suppliers; 2 70% 60% 8, 12, 2020 goal end of 2018 SDGs
development of action plans where improvement is necessary 16, 17
Risk assessment of products that we sell in >99% 91% 3, 12
2 O
ur suppliers are evaluated based on risk due to the size and scale of our supplier portfolio. We define relevant suppliers as Tier 1 suppliers showing an elevated sustainability risk potential
as identified by our risk matrices and our purchasers’ assessments. We also use further sources of information to identify relevant suppliers such as evaluations from Together for Sustaina-
quantities of more than one metric ton per year worldwide
bility (TfS), a joint initiative of chemical companies for sustainable supply chains.
Growth and profitability Energy and climate protection
Status at
As determined in 2015, our aim was, on average, to grow sales slightly faster and EBITDA considerably faster than global chemical 2020 goal end of 2018 SDGs
production (excluding pharmaceuticals; 2018: 2.7%; average change since 2015: 3.3%), and to earn a significant premium on our cost Coverage of our primary energy demand by certified energy management systems 90% 73.0% 7, 12, 13, 14, 15
of capital. Another goal was to achieve a high level of free cash flow each year, either raising or at least maintaining the dividend at the (ISO 50001) at all relevant sites 6
previous year level. Reduction of greenhouse gas emissions per metric ton of product sold (40%) (34.2%) 12, 13, 14, 15
(except Oil & Gas, baseline 2002)
6 The selection of relevant sites is determined by the amount of primary energy used and local energy prices; figures relate to BASF operations including the discontinued oil
Average change and gas business.
2018 Change since 2017 since 2015 4
Sales3 €62.7 billion 2.4% 3.3%
EBITDA 3
€9.2 billion (14.9%) 3.8%
Water
Dividends per share paid out €3.10 €0.10
Status at
Premium on cost of capital €0.8 billion 2025 goal end of 2018 SDGs
Free cash flow €4.0 billion Introduction of sustainable water management in all production units located in areas that are 100% 50.0% 3, 6, 12, 14, 15
prone to water stress and in all Verbund units (except Oil & Gas)
3 T
he average change was calculated using the changes in the non-adjusted figures from 2015 to 2017 and the change in the adjusted figures from 2018 to 2017. This gives an approximate
average change on a comparable basis in each case. However, the figures do not take into account the structural decline in sales and EBITDA due to the classification of the oil and gas
business as a discontinued operation.
4 Baseline 2015: excluding the gas trading and storage business transferred to Gazprom
Products and solutions
Status at
2020 goal end of 2018 SDGs
Increase the proportion of sales generated by products that make a substantial contribution to 28% 27.7% 3, 8, 9, 12, 13
sustainable development (Accelerator products)
1 Sustainable Development Goals (SDGs): SDG 1 – No poverty, SDG 2 – Zero hunger, SDG 3 – Good health and well-being, SDG 4 – Quality education, SDG 5 – Gender equality, SDG 6 – Clean water and sanitation,
SDG 7 – Affordable and clean energy, SDG 8 – Decent work and economic growth, SDG 9 – Industry, innovation and infrastructure, SDG 10 – Reduced inequalities, SDG 11 – Sustainable cities and communities,
SDG 12 – Responsible consumption and production, SDG 13 – Climate action, SDG 14 – Life below water, SDG 15 – Life on land, SDG 16 – Peace, justice and strong institutions, SDG 17 – Partnerships for the goals
9 BASF in South America Report 2018 BASF in South America Report 2018 10
The BASF Group The BASF Group
Europe
The BASF Group

BASF Group sales 2018: €62,675 million
EBIT 2018: €6,033 million
28,502
Sales 1 (in million €)
3,210
EBIT (in million €)
75,188 Asia Pacific
Employees 2
North America
Antwerpen
Florham
Park
Ludwigshafen
13,886
Nanjing
16,659 Geismar
Hong Kong
1,820
Sales (in million €)
1
802
Freeport
19,303
Employees 2
20,069 Kuantan
Employees 2
South America,
Africa, Middle East
São Paulo
3,628
201
Regional centers
Selected sites
Verbund sites
Selected research and
7,844
development sites
Employees 2 1 In 2018, by location of company

2 At year-end 2018
11 BASF in South America Report 2018 BASF in South America Report 2018 12
The BASF Group
Corporate Strategy the most pressing challenges of our time. To combat climate change
and global warming, we have committed ourselves to growing produc-
At BASF, we are passionate about chemistry and our customers. tion volumes without adding further CO2 emissions until 2030. This
Thanks to our expertise, our innovative and entrepreneurial means we will decouple greenhouse gas emissions from organic
spirit, and the power of our Verbund integration, our innova- growth. We have also defined targets for a sustainable product port
tions have decisively contributed to changing the world we live folio, responsible procurement and engaged employees. Safety for
in for the better for more than 150 years. To be the world’s people and the environment, inclusion of diversity and water manage-
leading chemical company for our customers, we will grow ment will remain a top priority.
profitably and add value to society. This is how we create che-
mistry for a sustainable future. The new targets apply from 2019 onward and replace our previous
goals. In this way, we want to steer our business into a sustainable
Today, the world is changing more rapidly than ever before, driven by future and, at the same time, contribute to the implementation of the
demographic change and new digital technologies. Our customers in United Nations’ Sustainable Development Goals (SDGs).
different industries and regions face diverse social and environmental
challenges due to limited natural resources and increasing consumer Our strategic action areas
demands. Chemistry is key to solving many of these challenges. By
combining our unique expertise with our customers’ competence, we To reach our goals and be the leading company in the chemical indus-
will jointly develop profitable, innovative and responsible solutions for try for our customers, we want to strengthen our performance in inno-
these global trends. vation and in operations as the leading chemical producer and plant
operator, leverage digital ways of working across the entire company,
and integrate sustainability more deeply into our business decisions.
Our purpose reflects what we do and why we do it:
We want to strengthen our passion for our customers in all employees.
We create chemistry for a sustainable future.
We aim to strengthen our portfolio and further develop our organization
to better meet customer needs using the power of our Verbund inte-
We pursue this purpose with our corporate strategy, which was upda- gration. We have defined six strategic action areas through which we
ted in 2018. We want to contribute to a world that provides a viable will sharpen our customer focus. 1
future with enhanced quality of life for everyone. This is why we offer
products and solutions that make the best use of available resources. Action areas sharpen customer focus
I nno
Our aspiration is to be the world’s leading chemical company. With our vat
ion
updated corporate strategy, which was announced in November 2018, Operat ions
il i ty
we are targeting profitable growth. We aim to grow organically and thus Dig
b
ita
na
li za
will strengthen our customer focus. The Asian market plays an important
tai
lio
tfo
Su s
Peop
or
t io
role in our growth strategy. With a share of more than 40%, China is al- le
n
P
ready the largest chemical market and drives the growth of global che-
Our
mical production. By 2030, China’s share will increase to nearly 50%, and Customers
we want to participate in this growth. To drive forward our growth in this
dynamic market, we plan to build an integrated Verbund site in Zhanjiang
in the southern Chinese province of Guangdong. We also want to ex-
pand our existing joint venture with Sinopec in Nanjing.
As part of our aspiration to be the world’s leading chemical company

for our customers, we want to strengthen our passion for customers
throughout the entire organization. We want to grow profitably and
create value for society. To achieve this, we have set ourselves Innovation
ambitious financial and nonfinancial targets. Our ambition is to be the most attractive partner for our customers
whenever they are confronted with challenges that can be approached
New targets from 2019 onward with chemistry. Our research and development competences are uni-
que in the chemical industry. We aim to build on and leverage our po-
Business success tomorrow means creating value for the environment, sition as a leading innovator to jointly develop innovations for our cus-
society and business. We have set ourselves new financial and nonfi- tomers. We will design our innovation chain to be as seamless as pos-
nancial targets so that our customers, investors, employees and other sible so that we can bring products to the market more quickly. This
stakeholders can track our progress. means fostering a higher level of excellence throughout the entire inno-
vation process, starting from the lab all the way to the customer.
We want to grow faster than the market and thus be economically
successful and profitable. Furthermore, we want to provide answers to
1 W
e defined six strategic action areas in our updated corporate strategy, which was announced in November 2018. They build on the four strategic principles of the “We create chemistry” strategy – we add value as one
company; we innovate to make our customers more successful; we drive sustainable solutions; we form the best team – according to global trends and challenges as well as their implications for BASF.

The BASF Group
New targets from 2019 onward

Financial targets Nonfinancial targets Existing nonfinancial targets
Grow sales volumes faster than Grow CO2-neutrally until 2030 Reduce the overall rate of accidents
global chemical production with sick leave per 200,000 hours
every year worked to ≤ 0.1 until 2025
Increase EBITDA before special Achieve €22 billion in Accelerator Reduce the overall rate of process
items by 3% to 5% per year sales2 by 2025 safety incidents per 200,000 hours
worked to ≤ 0.1 until 2025
Achieve a return on capital employed Cover 90% of our relevant spending3 Introduce sustainable water manage-
(ROCE)1 considerably above the cost with sustainability evaluations by ment at all production sites in water
of capital percentage every year 2025, and have 80% of our suppliers stress areas and at all Verbund sites
improve their sustainability perfor- by 2030
mance upon re-evaluation
Increase the dividend per share More than 80% of our employees Increase the proportion of women in
every year based on a strong free feel that at BASF, they can thrive and leadership positions with disciplinary
cash flow perform at their best responsibility to 22–24% by 2021
1 R eturn on capital employed (ROCE) is a measure of the profitability of our operations. We calculate this indicator as the EBIT generated by the segments as a percentage of the average cost of capital basis.
2 Accelerator products are products that make a substantial sustainability contribution in the value chain.
3 We understand relevant spending as procurement volumes with suppliers defined as relevant.
Sustainability Portfolio
We are successful in the long term when our products, solutions and We will sharpen our portfolio and focus our capital allocation more
technologies add value to the environment, society and the economy. towards growing business areas. We will focus primarily on organic
We want to be a thought leader in sustainability and increase the rele- growth through capital expenditures and innovation, but also make
vance of sustainability in our decision-making processes and business targeted acquisitions where this makes strategic sense and creates
models. This secures the long-term success of our company, creates value. The new segment structure will create a higher transparency
business opportunities and establishes us as a key partner supporting regarding the steering of our businesses, the importance of value
our customers. chains and the role of our Verbund. The physical, technological, market
and digital integration of the Verbund continues to be at the core of our
Operations portfolio and our unique strength.
We are committed to running our production safely, efficiently and re-
liably so that we can deliver products to our customers on spec and on Employees
time. We aim to further improve the reliability and availability of our We aim to clearly position each business against its relevant competi-
plants, as well as our agility. Above and beyond this, continuous pro- tors and establish a high-performance organization to enable us to be
cess improvements and effective debottlenecking of our existing asset successful in an increasingly competitive market environment. We will
base are paramount to ensure our competitiveness. adapt our business models and organizational structures so that each
business unit can optimally serve its market segment. Our people are
Digitalization what will make the implementation of our updated strategy successful.
We want to make digitalization an integral part of BASF’s business. This We rely on the engagement of our employees and give them the tools
will create additional value for our customers, grow our business and and skills necessary to be able to offer our customers differentiated and
improve efficiency. By promoting comprehensive digital skills among customized products and services.
our future leaders and our entire workforce, we will ensure that the
necessary resources are available.
Corporate values
guide our conduct and actions
Creative: We make great products and solutions for our custom- Responsible: We value the health and safety of people above all
ers. This is why we embrace bold ideas and give them space to else. We make sustainability part of every decision. We are com-
grow. We act with optimism and inspire one another. mitted to strict compliance and environmental standards.
Open: We value diversity, in people, opinions and experience. Entrepreneurial: We focus on our customers, as individuals and
This is why we foster feedback based on honesty, respect and as a company. We seize opportunities and think ahead. We take
mutual trust. We learn from our setbacks. ownership and embrace personal accountability.

BASF on the Capital Market
BASF on the Capital Long-term performance of BASF shares compared with indexes
Market
Average annual increase with dividends reinvested
2013–2018 (1.5%)
2.0%
In 2018, the stock markets were characterized by long pe- 2.0%
riods of uncertainty as a result of geopolitical tensions and 4.9%

trade conflicts, especially between the United States and 2008–2018 12.3%
China. The BASF share price declined considerably over the
8.2%
course of the year. We stand by our ambitious dividend policy
5.2%
and will propose a dividend of €3.20 per share at the Annual
Shareholders’ Meeting – an increase of 3.2% compared with 11.4%
the previous year. BAS share DAX 30 EURO STOXX 50 MSCI World Chemicals
BASF share performance

Weighting of BASF shares in important indexes as of December 31, 2018
BASF shares decline 34.2% in 2018
DAX 30 6.3%
Long-term performance continues to clearly exceed
benchmark indexes EURO STOXX 50 2.6%
MSCI World Chemicals 7.0%

The BASF shares closed the 2018 stock market year with a closing
price of €60.40, a decrease of 34.2% compared with the previous
year’s closing price. The considerable year-on-year decline in the Assuming that dividends were reinvested, BASF’s share perfor-
BASF Group’s earnings was primarily attributable to considerably mance declined by 31.8% in 2018. The benchmark indexes of the
lower earnings in the Chemicals segment, mainly as a result of lower German and European stock markets – the DAX 30 and the EURO
margins for isocyanates and steam cracker products. The segment’s STOXX 50 – lost 18.3% and 12.0% over the same period, respecti-
earnings were also negatively impacted by the low water levels on vely. The global industry index MSCI World Chemicals fell by 14.4%.
the Rhine River in the second half of 2018. In addition, geopolitical
tensions and trade conflicts, especially between the United States Viewed over a 10-year period, the long-term performance of BASF
and China, led to a slowdown in economic growth over the course shares still clearly surpasses the German, European and global
of the year particularly in Asia, and there mainly in China. The ensuing benchmark indexes. The assets of an investor who invested €1,000
downturn in demand from significant customer industries, in parti- in BASF shares at the end of 2008 and reinvested the dividends in
cular the automotive industry, further weighed on BASF’s share per- additional BASF shares would have increased to €3,201 by the end
formance. of 2018. This represents an annual yield of 12.3%, placing BASF
shares above the returns for the DAX 30 (8.2%), EURO STOXX 50
(5.2%) and MSCI World Chemicals (11.4%) indexes.
Change in value of an investment in BASF shares in 2018

With dividends reinvested; indexed
110 110
100 100
90 90
80 80
70 70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
BASF share –31.8% DAX 30 –18.3% EURO STOXX 50 –12.0% MSCI World Chemicals –14.4%

BASF on the Capital Market
Proposed dividend of €3.20 per share Broad base of international shareholders
At the Annual Shareholders’ Meeting, the Board of Executive Directors

With over 600,000 shareholders, BASF is one of the largest publicly
and the Supervisory Board will propose a dividend payment of €3.20
owned companies with a high free float. An analysis of the shareholder
per share. We stand by our ambitious dividend policy of increasing our
structure carried out at the end of 2018 showed that, at around 20% of
dividend each year and plan to pay out €2.9 billion to our shareholders.
share capital, the United States and Canada made up the largest re-
gional group of institutional investors. Institutional investors from Ger-
Based on the year-end share price for 2018, BASF shares offer a high
dividend yield of around 5.3%. BASF is part of the DivDAX share index, many accounted for around 13%. Shareholders from the United King-
which contains the 15 companies with the highest dividend yield in the dom and Ireland hold 10% of BASF shares, while investors from the
DAX 30. rest of Europe hold a further 17% of capital. Approximately 30% of the
company’s share capital is held by private investors, nearly all of whom
Dividend per share reside in Germany. BASF is therefore one of the DAX 30 companies
€ per share with the largest percentage of private shareholders.
3.10 3.20
2.90 3.00
2.70 2.80 Shareholder structure
2.50 2.60
By region, rounded
2.20
6% Not identified
Rest of world 4%
1.70
Rest of Europe 17%

43% Germany
United Kingdom/Ireland 10%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20% United States/Canada
Employees becoming shareholders
In many countries, we offer share purchase programs that turn our

employees into BASF shareholders. In 2018, for example, 25,000 em-
ployees (2017: 23,700) purchased employee shares worth €79 million
(2017: €63 million).

Our Way
In South America, BASF maintains its global
commitment to take care of the environment,
developing and offering solutions to the market
that combine productivity and sustainability.

BASF in South America
BASF in South America – Local Report

Executive Committee
Vera Felbermayer Eduardo Leduc André Oliveira André Wehrmann Ewald Maier-Erhart1
Vice President Vice President Legal Director, Senior Vice President Vice President
Technical Services Agricultural Insurances, Intellectual Finance, Management Human Resources
and Infrastructure Solutions Property and Chief and Business Centers
Compliance Officer South, North and West
Marcos Allemann Antonio Lacerda Manfredo Rübens Gisela Pinheiro2 Cristiana Brito
Vice President Senior Vice President President Vice President Director Corporate
Decorative Paints Chemicals and Materials and Affairs and
Performance Products Functional Solutions Sustainability
and Sustainability
1 Ewald Maier-Erhart was Vice President Human Resources South America until April 30, 2018, when he began his retirement. His successor as Vice President Human Resources South America is Luciana Amaro (effective May 1, 2019).
2 Gisela Pinheiro was Vice President Materials and Functional Solutions for South America until the end of March 2019. On April 1, 2019, she started a delegation at BASF SE in Ludwigshafen, Germany.

Together we build tomorrow

BASF is optimistic about the future and we believe
that our people are the key to contributing to a
better tomorrow and to grow our business, to
generate value for society and the environment.
We can make important contributions in three
areas: resources, environment and climate; food
and nutrition; and quality of life.
19
BASF in South America and 42 research and innovation centers in agriculture, two of them
being global, the company had a portfolio for different sectors as well
Overview as for end consumers, which was divided into six segments (since
Jan/2019): Chemicals, Materials, Industrial Solutions, Surface
At BASF, we create chemistry for a sustainable future. We Technologies, Nutrition & Care and Agricultural Solutions.
combine economic success with environmental protection
and social responsibility. Our products and solutions con- The operational structure in the region is divided into four
tribute to the preservation of natural resources, ensuring Business Centers (BC): Brazil, South (Argentina, Bolivia, Paraguay and
healthy food and nutrition, and helping to improve the quality Uruguay), West (Chile and Peru) and North (Colombia, Venezuela,
of life. Sustainability and innovation are forces that go hand in Ecuador, Suriname and Guyana). In 2018, BASF’s sales to customers
hand with our strategy for generating revenue, reducing costs in South America amounted to €3,321 million, which represents an
and generating a positive impact on society. increase of 5% compared to the previous year.
The headquarters of BASF in South America is located in the Morumbi Figures for 2017 were restated with the presentation of the oil and gas activities as discontinued operations.
neighborhood, in the city of São Paulo, Brazil. With 17 production sites For more information, see basf.com/report
Units
La Calera
Jaboatão dos Guararapes

Callao
Camaçari
Lima
Trindade
Guaratinguetá
Jacareí
Santo Antônio de Posse
São Paulo
Demarchi
Vila Prudente
Santiago Indaiatuba
Concon Jundiaí – Chemetall
Casa E
General Lagos
Burzaco ECO Space Foundation (FEE)
Tortuguitas
Santo Tomé
Regional center (headquarters)

Selected sites
Selected research and development sites
House concept and ECO Space Foundation (FEE),
Instituted and maintained by BASF
BASF in South America Employees, as of December 31, 20181

Sales by location of customer in 20181
€3,321million 6,180
1 These numbers differ from the regional overview in the world map (page 11), because the latter considers both South America, Africa and Middle East

Sales in South America by Petrochemical Complex in the metropolitan region of Salvador and
Business Center1 has a production capacity of 360,000 tons per year of products such
as superabsorbents (SAP), acrylic acid and butyl acrylate, raw
South materials for products such as diapers, paints, fabrics and adhesives
(Argentina, Bolivia, Paraguay and Uruguay)
€466 million (14%)
and building materials.
Brazil
€2,372 million (72%) Guaratinguetá (SP)
The Chemical Complex in Guaratinguetá is the company’s largest
unit in South America, responsible for the production of about 1,500
€3,321 million West different types of products such as pesticides, sodium methylate,
(Chile and Peru)
€274 million (8%)
raw materials for adhesives, resins, paints, detergents, cosmetics
and solutions for the automotive market, among others.
The Global Environment and Food Safety Laboratory (GENCS) is

North
(Colombia, Venezuela, Ecuador and Guyanas) the only from the company that is located in the southern
€209 million (6%)
hemisphere, the others are in Germany and the United States. The
1
By location of customer
studies carried out at GENCS evaluate agrochemical residues in
food and the behavior of these products in the environment. These
Main Sites in Brazil studies are required by international regulatory authorities for the
registration of new products and for the extension of use of existing
Business Center Brazil
ones. In 12 years, GENCS has conducted more than 5,000 trials
São Bernardo do Campo (SP) and research tests on about 50 crops, guaranteeing farmers the
Industrial Complex for producing Paints and Varnishes has an annual security of marketing their crops in Brazil or exporting them to
production capacity of up to 330 million liters of paints, enamels, various countries.
varnishes and resins. It is responsible for the production of decorative
paints (Suvinil and Glasurit) and automotive paints (OEM). Indaiatuba (SP)
It produces catalysts for motorcycles, cars and trucks, serving the
Camaçari (BA) main car manufacturers in Brazil and Mercosur. The catalysts are
The Camaçari Acrylic Complex is the largest South American responsible for the reduction of pollutants generated by combustion
investment in BASF’s history. The plant is located in the Camaçari engines.
Industrial Complex for producing paints and varnishes, São Bernardo do Campo — Demarchi (SP, Brazil).

Santo Antônio de Posse (SP)

Experimental Agricultural Station is the largest research center that BASF
has globally. It develops research and studies focused on the deve-
lopment of new products for the control of pests, diseases and weeds
that attack the main crops in Brazil and in Latin American countries.
São Paulo (SP)

Located in the neighborhood of Vila Prudente, it produces more
than 130 types of products, among them concrete additives and
construction chemicals.
The BASF’s Brazilian headquarters is located in the neighborhood

of Morumbi, in a building equipped with high technology in terms
of management of natural resources, classified by GBC – Green
Experimental Agricultural Station, Santo Antônio de Posse (SP, Brazil). Building Council with the Leed Gold Seal (Leadership in Energy and
d Environmental Design).
Jacareí (SP) Trindade (GO)

In jacareí, we produce raw materials for the hygiene and personal care, The BASF Cotton Research and Improvement Center presents the
cleaning, agriculture, mining and paints sectors. It has a research and entire culture seed study infrastructure. The only one of its kind in
development center in the area of cosmetics and home care, as well as Latin America, the center is responsible for the development of new
an application of nutrition and health center with the latest technology to cotton varieties and for the genetic improvement program, which
serve the food and pharmaceutical industries of South America. The unit has two satellite research stations: Luis Eduardo Magalhães (BA)
also provides logistics services to various divisions of the company with and Campo Verde (MT).
a Sample Preparation Center and a Packing Center.
Main Sites in Argentina
Jaboatão dos Guararapes (PE)
Business Center South
It produces paints and textures for the decorative brands Suvinil and
Glasurit, focused on the North and Northeast markets. General Lagos
It produces polymeric dispersions and operates the product distribution
Jundiaí (SP) center for crop protection.
BASF’s surface treatment plant operates under the trademark
Chemetall, which introduced thin film technology to the Brazilian Salto
market. This high-performance technology replaces traditional heavy At the Salto site, soybean production is carried out in the field and
metal pretreatment processes with more sustainable alternatives, then processed and packaged under the brand name Credenz®,
which also helps customers significantly reduce their process costs using soybean seeds that are developed by BASF using intelligent
and their energy and water consumption. genetics.
The Chemical Complex in Guaratinguetá is the company’s largest site in South America.

Tortuguitas
It produces automotive and overcoating paints. It has a distribution
center, color labs and training centers in overcoating and light metal
sheets.
In Argentina, BASF also has production sites in Santo Tome (where

crop protection products are produced and distributed) and Burzaco
(where polyurethanes are manufactured).
Main Site in Uruguay
Montevideo
The BASF’s Shared Services Center for Finance, Controlling and
Purchasing centralizes the entire American continent’s services. It
serves the demand of approximately 80 company affiliates in more
than 20 countries in North America, Central America and South
America.
Main Sites in Chile Site in Concón (Chile).
Business Center West

the detergent and formulator industries and for mining. The
Santiago factory has two polymerization lines that serve the local and
It produces concrete additives and products for construction export market.
systems. It also has a Development Center to customize solutions
for local market conditions, such as Master Polyheed® and Master Lima
Glenium®, additives that significantly reduce the customers’ water It formulates and produces liquid additives for the ready-mix concrete
consumption in the concrete mixture. industry, and for the underground mining segment. It has a complete and
modern technical application lab for designing constructive solutions.
Concón
Producing dispersions, resins and solutions for agriculture. Main Sites in Colombia
Business Center North

Main Sites in Peru
La Calera, Bogotá
Business Center West
It produces powders, additives and polymers for the construction
Callao chemicals division. It has three production units, storage areas and
Responsible for manufacturing of dispersions and polymers for a quality control laboratory.
Automotive paint and refinishing factory in Tortuguitas (Malvinas Argentinas, Argentina).

We create chemistry
for a sustainable future
We do this together with customers, suppliers and
partners. The company acts with open dialogue and
believes in the power of connectedness. After all, it
is possible to be sustainable and efficient, res-
ponsible and productive, as well as unite diversity
and talents, social challenges and business strategy.
A child participating in the Projeto Brincando ComCiências

Corporate Governance
Corporate Governance The Senior Committee of South America brings together the
president, vice presidents of business & fundions managers from human
resources, institutional relations and the legal area, as well as the technical
The two-tiered governance model guides BASF’s corporate services and infrastructure departments. It is responsible for carrying out
governance structure, where management and supervision all the operations and carrying out the administrative acts necessary to
are divided between the Board of Directors and the Supervisory achieve the objectives of its position, in accordance with the overall
Board. orientation of the business, established by the Board of Directors.
The Board of Executive Directors manages and monitors the Ethics and integrity
business of the BASF Group through the planning and definition of
the corporate budget; resource allocation and management BASF has a structured global compliance program. Throughout 2018,
capacity; monitoring and decision making in relation to significant the risk assessment that was started in Brazil in the previous year was
individual measures and operational management control. extended South America-wide and reinforced the adherence of the
leadership and other employees to the compliance system in all of the
The Supervisory Board is made up of 12 members, six representing countries. During the year, the company looked at the different functional
the shareholders elected in the Annual Shareholder’s Meeting and areas of the company to evaluate their individual risks, based on the
six employee representatives, appointed by the respective actions defined in the analysis performed in 2017. In addition to this, the
representative body, BASF Europa Betriebsrat (BASF European disclosure of the compliance channels and their importance was
Labor Council). reinforced among all employees. The Ethics Channel received a new
contact telephone number and now employees also have the possibility
of sending in their suggestions via website, email or application.
Two-tier management system of BASF SE
Junta Diretiva Junta de Supervisão

Board of Executive Directors Supervisory Board
nomeia a Junta Diretiva
appoints the Board of Executive Directors
monitora a Junta Diretiva

monitors the Board of Executive Directors
orienta a Junta Diretiva

advises the Board of Executive Directors
reporta para a Junta de Supervisão

reports to Supervisory Board
77 membros
members 12
12membros
members
nomeadosby
appointed pela
theJunta de Supervisão
Supervisory Board 6 6shareholder
representantes dos acionistas,
representatives elected
Presidente eleitos
at the Annual durante a Meeting
Shareholders’
Chairman
nomeado pela Junta de Supervisão Assembleia Anual andde Acionistas
appointed by the Supervisory Board
e 6 representantes dos colaboradores
6 employee representatives
Presidente
Chairman
eleito pela Junta de Supervisão
elected by the Supervisory Board

Business Development
Our ambition
We have a clear ambition for the future: our
customers must experience a new BASF. By
combining our unique knowledge in chemistry
with the competence of our customers, together
we will develop cost-effective and responsible
solutions for society and the planet. By doing
this, we will, we will grow profitably and create
value for society.

Business Development as trademarks for crops in important markets; the vegetable seeds
business; the R&D platform for hybrid wheat; various seed treatment
products; glyphosate herbicides in Europe, mainly used for industrial
On August 1, 2018, BASF SE acquired significant parts of the applications; the complete xarvio™ digital agriculture platform; as well
seed and non-selective herbicide business as well as assets as non-selective and nematicidal herbicide research projects.
of Bayer AG. An additional acquisition of the global vegetable
seeds business followed on August 16, 2018.
The transaction was a strategic complement to the crop protection, The vegetable seed business covers 24 crops and appro-
biotechnology and digital agriculture activities of the company and ximately 2,600 varieties. It also includes a strong R&D
marked its effective entry into the market of soy, cotton, canola, pipeline and a well-established and robust genetic bree-
vegetable and fruit seeds. With the acquisition, BASF received ding system with more than 100 unique programs in more
approximately 500 employees in South America. The agreements than 15 crops.
include Bayer’s global ammonium glufosinate business; the seed
business, including traits, research and improvement capacity, as well
Integration of new employees in Agricultural Solutions.
Alignments and new connections of employees in South America.

Innovation
Innovation is one of the strategic action areas and is related
to its continuous improvement, as well as to the development
of innovative solutions that are closer to customers and the
increase of excellence in regional and internal innovation.
For BASF, innovation is fundamental to meeting the current
and future needs of society, which is constantly growing.
Agriculture
Continuous investments in innovation will expand BASF’s portfolio of

agricultural solutions which will go even further, by integrating biological
solutions and digital tools and devices.
The BASF Agro application allows rural producers to access the Protection for seeds and seedlings against attacks from pests and
company’s main solutions, either for cultivation or for problems (pests, soil diseases.
diseases and weeds), as well as finding information quickly and
efficiently for efficient crop management. Thanks to the technology of Lupro-Grain®, which allowed for a
reduction in the pH-level and the fungal load of the grains, it was
Standak ® Top protects the genetic potential of soybeans and has possible to develop improvements in the corn silo bags. Silo bags are
multiple and complementary functions in its insecticidal and an option for the storage of corn, as the manufacture can apply the
fungicidal effect, shielding seeds and seedlings against attack from product to the materials thereby allowing to maintain the quality of the
pests and soil diseases that interfere with the process of germination cereal. BASF in Argentina, in partnership with the National Agricultural
and uniform crop development of soy. The solution is the only one Technology Institute (INTA), conducted a study that showed a marked
on the market with three distinct and efficient active ingredients in decrease in the amount of unwanted microorganisms after the Lupro-
pest management such as borer caterpillar, white grub and the Grain® application.
bean leaf beetle as well as important diseases that attack seeds
and seedlings.
BASF seeks to help coffee growers with the best management

practices to increase the profitability and longevity of their
production. The solutions can be used in different stages of
cultivation: for the flowering period, the fungicides Cantus ® —
responsible for inhibiting fungal infection and growth — and
Orkestra®SC — efficient in controlling the complex of diseases in
the coffee plantations — guaranteeing good flowering; for rust
control, Opera® ensures excellence in rust control and Comet® is
indicated to prevent the spread of cercosporiosis. The producer
should also be aware of the incidence of coffee borer, for which the
insecticide Verismo ® offers a new active ingredient with an
efficiency of above 80%.
The Clearfield® Production System features technology developed

in partnership with the Rio Grande Rice Institute (IRGA) to control red Solutions reduce productivity losses due to the incidence of weeds
rice and other important weeds. The Production System combines in soybean.
the cultivar IRGA 424 CL with the use of Only® and Kifix® herbicides
and allows the producers to optimize their resources and Focused on reducing productivity losses from the incidence of
improve the quality and productivity of the crops. BASF’s weeds in soybeans, BASF introduced two new herbicides: Atectra®,
technology allowed farmers in Rio Grande do Sul, Brazil’s largest rice for pre-planting management and focused on the broadleaf weeds that
producer, to increase from an average productivity of 5,000 to about are difficult to control, such as horseweed; and AmplexusTM which also
8,000 kilograms over the past 15 years. works in the management of pre-planting soybean desiccation, with
efficient control of narrow and broad leaf weeds, especially sourgrass.
BASF held an event with over 200 suppliers from the distribution BASF sponsors the Utopia Project, with a unique concept project,
channel’s sales force for the launch of Zidua, the new pre-planting which integrates the generation of educational and productive
herbicide for soy and corn. opportunities for young Colombians in rural areas, ones that have

Corrida Solar Atacama (Solar race): Thanks to the climate,

each year the Atacama Solar Race (Chile) takes place, an event
where solar vehicles from different regions compete. The Atacama
Desert in Chile receives an average of 4,000 hours of sunshine a
year. The meeting brings together participants and support from
different study centers, entrepreneurs and companies. Participants
are exposed to high altitudes, geographic diversity and radiation,
using electric vehicles which are divided into two categories: solar
and hybrid.
BASF is committed to promoting sustainable transport and boosting

renewable energies. That is why, for years, it has supported the
University of Santiago de Chile with the supply of resins for the
Innovative solutions reduce car noise. manufacture of solar cars that participate in this race. This material
helps reduce the weight of the vehicle, making it faster and more
efficient. In addition, it provides water-based paint (Glasurit), a
been affected by violence and have economic limitations. Through modern, eco-friendly paint that protects the substrate from the
education, they become leaders for the country’s social, political and various weather conditions during the race.
productive transformation. They make a significant and innovative
contribution to sustainable agriculture and return to their communities BASF has develop products to improve air quality, such as the Three
to implement projects that impact agriculture. Way Conversion (TWC) catalyst that removes the emission of carbon
monoxide, hydrocarbon and nitrogen oxide from the exhausts of
Automotive motor cars, as well as the Four Way Conversion (FWC) catalyst that
removes particle matter in addition to these three pollutants. The
As the largest chemical supplier to the global automotive industry, portfolio also includes innovative technologies such as EvapTrap MX
BASF has been working diligently to anticipate the needs of the and EvapTrap XC, which dramatically reduces evaporative
industry and develop innovative solutions that make mobility hydrocarbon emissions, and PremAir, which converts ground-level
move forward. smoke into oxygen as it passes through the radiator.
Products with higher durability, such as Emgard® lubricants protect A project, developed at BASF Argentina, aimed to position the
shafts and transmissions from wear and corrosion. In addition to AdBlue® solution to meet the new technology need in the diesel
providing a longer interval between oil changes, the lubricants also engine market, within the framework of the EURO V Standard, and
reduce the frequency of maintenance of the vehicle, ensuring more thus contribute to better air quality. The implementation of the
time on the road. The Keropur ® fuel additive enhances engine life EURO V Standard in Argentina led to the introduction of new
by protecting your intake system against deposits and reduces the technology in diesel engines and the need to use a complementary
energy expended by friction with the engine, thereby improving additive, the Urea ISO 22241 solution.
overall fuel economy and driver experience. BASF developed the
iGloss® varnish to set a new standard in scratch resistance, it helps
the car to look new for longer.
To reduce car noise, BASF offers Basotect®, an open-cell light

melanin foam, commonly used for engine coverings, ceiling linings,
transmission covers and panel insulation. In addition, to prevent
street, wind and engine noise from entering the interior of the
vehicle, Elastoflex® can fill cavities such as columns and sills in the
vehicle’s body. Cellasto microcellular polyurethane elastomer isolates
and reduces vibrations of bumpers, shock absorbers, chassis
spring insulators and supports for electric motors or battery packs.
This highly durable material is found in one of every second car
manufactured in the world.
An initiative supported by different bodies from the public and

private sectors in Argentina, including BASF, the ECO YPF
Challenge promotes a competition for electric cars with zero-
emission, designed by technical school students from all over the
country. BASF supports the initiative through the Glasurit® brand of
automotive paints. Our catalysts improve air quality

Construction Personal Care
In 2018, after a detailed study, Suvinil, BASF’s brand of decorative BASF is a global leader in the development of solutions for sun
paints, identified the opportunity to approach consumers who are protection and active biotechnological ingredients for the personal
more engaged and autonomous in choosing their products, and care industry, BASF constantly invests in research and innovation to
underwent a brand repositioning process. meet the needs of this market.
In addition to a new positioning and a new purpose, the entire To achieve a whiter effect when washing clothes in a washing
portfolio has been reorganized into four lines that respond to machine without having to separate the colors from the whites, in
consumers’ motivations and facilitate the process of choosing a addition to providing great practicality, it is also a great contribution
product. Yield and Renew, for those seeking easy application and a to sustainability, as it reduces the consumption of electricity, water
simple and quick renovation; Care and Protect, for consumers who and time, because it allows the washing of the same volume of
value functional benefits and technology and seek to protect and add laundry in fewer wash cycles. This is due to the innovation of the
value to their assets; Tones and Touches, for those who care about active ingredient Sokalan® HP 56, which acts as an inhibitor to the
the final finish and want a variety of colors; and the line Color and transfer of colors and prevents them from migrating from one piece
Style, which was developed for the trendier public who see their to another during washing, protecting them and leaving them
house and its paint as a form of expression of their style. brighter and newer looking for longer.
The addition of a protease in combination with conventional

ingredients such as surfactants or polymers enhances the
performance of concentrated liquid detergents at room
temperature and is especially effective against blood, milk and egg
stains. BASF’s latest protease, Lavergy® Pro 104 LS, is a stabilized
enzyme that makes the formulation simple and sustainable.
Suvinil transforms environments.
Online sales: Suvinil’s e-commerce completed one year and had

more than one million visitors, in addition to providing more than
60,000 products. In 2018, Suvinil’s digital experience expanded
and consumers from 11 Brazilian capitals were able to choose their
paint in the Suvinil Store and receive it at home, delivered by the
nearest dealer.
Technical insulation panel: BASF and Kingspan Isoeste, a

leading customer of performance materials, have developed
isothermal panels that function as a sandwich panel made of rigid
foam, composed of polyisocyanurate (PIR), they provide thermal
comfort and stability to environments. The technology is
recommended for any type of construction and promotes the Solutions that make everyday life easier.
saving of energy — as spending on air conditioning is reduced — in
addition to avoiding waste during construction, especially of water, For convenience and ease, BASF provides customers with high-
as it is a dry construction. performance water-soluble polymers for stain-free, risk-free drying,
long-lasting brightness and an easy-to-clean effect on a variety
Polyurethane insulation panels: BASF and Térmica San Luis of surfaces. The new Polyquart® Ecoclean Max bio component
have jointly produced polyurethane panels for use in high-volume polymer for surface cleaners combines all these properties with an
cold rooms and for the construction of efficient homes, for traditional excellent environmental profile.
and social purposes. This type of product contributes to greater
energy efficiency and a significant increase in construction Attentive to the demand of consumers looking for products that
productivity. In addition to this, it represents a solution that provides generate less impact on the environment, BASF has also developed
greater comfort in homes and other buildings. natural and organic ingredients for the cosmetics industry.

Texapon® S2 DM: replaces the sulphate in the shampoos, providing Health and nutrition
a smoother cleaning of hair, without the natural oils of the hair being
removed and thus avoiding dryness. With innovative solutions and modern technologies, BASF helps its
customers improve business efficiency and the sustainability of their
Gluadin Kera® P LM: used in shampoos and conditioners, is a products. The company offers a comprehensive portfolio of products
protein derived from soybeans and rice, used as a substitute for and services for the human, animal, pharmaceutical, aroma and
animal keratin. fragrance industries.
Tinogard® CP: A high performance liquid antioxidant solution that Innovative Accelon™ Technology increases, up to four times, the
acts on stabilization and improves product life. Developed and absorption of omega 3 EPA (eicosapentaenoic acid) and DHA
produced in Brazil, the product is versatile and can be used in (docosahexaenoic acid). With this, BASF is starting to establish new
various cosmetic applications and is ready to be added to the absorption standards for the omega 3 supplement industry in South
formulation, dispensing with pre-solubilization and/or heating. America and worldwide.
Massive palm cultivation is of concern worldwide. Aware of this In addition to Palatal ® resin, being used in the manufacture of
scenario, BASF offers its customers a certified version of the product tanks for farming on land, BASF seeks alternative solutions to
following the criteria of the RSPO Mass Balance. This certification ensure sales to the international market and increase the immunity
ensures that the company is receiving a responsibly produced of animals.
ingredient, taking into account the principles and criteria of the
Roundtable on Sustainable Palm Oil (RSPO) such as being free from
slave and child labor, acting with respect to people and traditions and
without harming the environment. As a result, it contributes to the BASF Solutions for
better use of resources and management practices and increases the cultivation of salmon
competitiveness.
One of the solutions is organic minerals, which belong to the
In addition, BASF is committed to ensuring that, by 2020, 100% of line of chemicals for animal nutrition, and are added to fish
palm oil and palm kernel oils purchased by the company will have feed. As a result, salmon has a higher thermal resistance,
RSPO certification, and in the case of fractions of these oils and considerably reducing the occurrence of diseases and the
primary oil chemical derivatives, due to their high complexity in the use of antibiotics in the breeding cycle.
supply chain, the commitment is to reach this goal by 2025.
To learn more, visit basf.com.br This provides a new therapeutic and nutritional source to
solve health problems and decrease the use of medicines.
The application of organic minerals appears as a prophylactic
alternative against the incidence of various diseases.
More information can be found at

http://bit.ly/sustentabilidadetanques
Organic Minerals
Organic Minerals
How do they work? Benefits
Mixed into fish food Fish that are more
How do theyless
heat resistant, work? Benefits
Fish that are more
OrganicMixed into
sensitive
Minerals to fish food
bacteria
and thereby using heat resistant, less
less antibiotics sensitive to bacter
How do they work? Benefits
Mixed into fish food and thereby using
Fish that are more
less antibiotics
heat resistant, less
sensitive to bacteria
and thereby using
less antibiotics
Palatal® Resin
Benefits
Prevents the accumulation of any
How do they work?
types of particles, thereby reducing
It is used in the manufacture
the risk of diseases in animals
of tanks, producing
Palatal
completely smooth ® Resin
Palatal Resin
®
surfaces Benefits
Benefits
Prevents
Prevents the accumulation
the accumulation of any of any
How
How do dothey
theywork?
work?
types of particles, thereby reducing
ItIt is
is used
used ininthe manufacture types of particles, thereby reducing
themanufacture
of tanks,
tanks, producing the
the risk of risk of diseases
diseases in animalsin animals
of producing
completely smooth
completely smooth
surfaces
surfaces
Palm oil: Certification assures respect for the environment and people.

Sustainability Along the Value Chain
Transforming business,
the environment and life
We are leaders in innovation. In total, more than
11,000 employees worldwide are dedicated to
research and development.

Sustainability Along
the Value Chain
Business success tomorrow means creating value for the
environment, society and business. This is why sustainability
has been reinforced as a cornerstone of our updated corporate
strategy. Using the various tools of our sustainability mana-
gement, we carry out our company purpose: “We create
chemistry for a sustainable future.” We systematically incor-
porate sustainability into our business. We understand future
sustainability trends and derive appropriate measures for our
business to seize business opportunities and minimize risks
along the value chain.
Inclusive Space: shared value in Chile and Argentina.
Social Commitment
Contribute to societal value
BASF contributes to a world that provides a viable future with an
enhanced quality of life for everyone. We do so by creating chemis- BASF develops shared value projects in Argentina, Brazil, Chile and
try for our customers and society and by making the best possible Peru, which involve professional training, income generation and the
use of available resources. To live our purpose we procure and pro- increase in rural productivity.
duce responsibly, work with fair and trustworthy partners, we con-
nect creative minds and find the best solutions to create and seize Inclusive Space trains young people in Chile, Argentina and
business opportunities as well as minimizing risk along the value Uruguai in situations of social risk, to work in the automotive
chain. This is part of the success of a business. refinishing sector. The initiative is carried out in partnership with
BASF customers and vocational training centers in the countries
Social engagement strategy involved and contributes to the training of skilled labor for the market.
BASF’s social engagement strategy aims to broaden the company’s

positive impact, by connecting the resolution of social challenges to
the business strategy, by focusing on three areas of expertise:
scientific education; employability; environmental education and
protection of natural resources and biodiversity. The strategy unites
shared value and corporate citizenship and has already impacted
more than 233,000 people in 2016 and 2017. In 2018 more than
177,000 people were impacted in South America.
tner shi ps
es s par Ne
sin w
bu
Bu sin
e ss e
Corporate Social
cc
ss
volunteering business
ta
mo
r ke
de
ma
Innovative
ls
Public private
partnership
partnerships Sta & relations Allin Kawsay
New
rti
th n
B r a n d re p u t a t i o n
o
g
Combining b
v en
Collaboration In Peru, the Allin Kawsay project, which in the indigenous

tures
Framework for
language of Quechua means “to live well”, seeks to promote
pment
Sustainability
Cause- Alternative
related business the increase of productivity of small farmers living in the
marketing hi p
Co models
Andes. In partnership with several organizations in the potato
rp .
c i t i z ens
velo
production chain, the initiative aims to increase the quantity

e
and quality of crops through the transfer of technology to

ed
Neighborhood
St
Sponsoring
engagement
protect the crop and encourage more sustainable agricultural
ye
ab
ol
le
practices. About 7,000 farmers have participated in the

p
Donations so
Em cie
tie trainings carried out by the project.
ons i t Stakeh
s
o l d e r re l a

In Chile, where the project started, the training was extended to the
automotive repair area, with the support of the company SK Bergé.
In Argentina, the initiative is carried out in partnership with Fundação
FORGE (FORGE foundation), the Malvinas Heroes Training Center,
while in Uruguay the young people were trained at the Universidade
do Trabalho do Uruguai (Uruguayan Labor University) - UTU, also
known as the Professional Technical Education Council, a public
science and technology education institution.
Suvinil, BASF’s brand of decorative pains in Brazil, has created an

online painter recommendation platform (vitrinesuvinil.com.br).
With this service, the consumer can find qualified and trained
professionals, who work in the vicinity of the address where the
painting service will be performed. By doing this, the company also
highlights and values the best professionals in Brazil and contributes
to their professional development. By the end of 2018, the Vitrine
Suvinil platform brought together 2,053 painters and 1,391 registered
consumers.
Corporate citizenship
Robótica Educacional (Educational Robotics) in partnership with
BASF Connect to Transform Unesp (SP, Brazil).
In 2018, BASF selected and sponsored 11 social and environmental The projects supported in Brazil, Chile and Argentina were:
impact projects through BASF Connect to Transform. The initiatives
are carried out in three South American countries. Playing with Science, of the Abrinq Foundatio (São Bernardo
do Campo, SP, Brazil): The project aims to encourage learning
In Brazil, in the cities of Guaratinguetá and São Bernardo do Campo related to the logica and scientific reasoning of pre-school students
(both in the state of São Paulo); in Chile, in Quinta Normal; and in through the improvement of pedagogical practices of the public
Argentina, in the Malvinas Argentinas, regions where BASF has school system. About 40 teachers were trained by the initiative and
production sites located. The selected initiatives contribute to the 1,800 students between the ages of 4 and 5 years benefited directly
Sustainable Development Goals (SDGs), defined by the United Nations from this.
(UN), which are also considered during the selection of projects.
Playing with Science, encourages learning in São Bernardo do Campo (SP, Brazil).

Educational Robotics, of Rever Juntos (Guaratinguetá, SP,

Brazil): The project brings high school teachers and students closer
to robotics and logic. The initiative which includes a partnership with
the State University of São Paulo (UNESP), helped students to
incorporate logical reasoning and interest in the exact sciences and
nature into the high school curriculum. About 175 students were
trained and 20 teachers participated in 33 workshops.
Experimental Program of the Siemens Foundation (Guaratin-

guetá, SP, Brazil): Supported for the second year, the project
promoted the teaching of natural sciences to elementary school
students of the municipal network. The project consisted of the
training of public school teachers, school administrators and
pedagogical coordinators, as well as holding of science fairs in
schools.
Mão na Massa Project Social and Environmental Mobilization (The Green and Blue
in the Valley) — Pathways of the Atlantic Forest, of the
Of the Geração Futura Institute (São Bernardo do Campo, SP, Ecological Corridor (Guaratinguetá, SP, Brazil): The project
Brazil): bakery training of 50 women living in the Demarchi, promoted awareness actions about the Vale do Paraíba and
Batistini, Botujuru and Casa neighborhoods, aged 18 and over, techniques for creating and maintaining community gardens. The
who are in a situation of low income and social vulnerability. The priority public was made up of approximately 1,800 students from five
community as a whole will be impacted, as the action of these municipal schools in neighborhoods close to BASF in Guaratinguetá.
women aims to strengthen local commerce.
Experimento program trains educators and students in Guaratinguetá (SP, Brazil).

Turning a Micro-business into

a Sustainable Business, from
Integrare (Chile, Quinta Normal):
Supported for the second year, the project empowered
and strengthened the competitiveness of micro-
businesses to achieve a higher degree of sustainability in
their businesses. Through workshops and seminars, it
encouraged the formalization of companies and the
creation of the certifications necessary for growth, as well
as promoting financial education.
In 2018, BASF selected another 12 projects that will be supported in 2019.

To get to know more about them access basf.com.br
Training and Work Program of the Forge Foundation (Argentina, Corporate volunteering
Malvinas Argentinas): Supported for the second year, the
initiative trained young people in situations of social vulnerability for the BASF’s volunteer commissions aim to identify and encourage
job market. Participants received tutoring and technical training in the employees to support social entities located in communities close to
areas of administration, sales, production and logistics, health and the production sites.
information technology. In 2018, the project included the active search
of the companies for the insertion of the young people in to the labor Altogether, in South America, there are 17 volunteer commissions in
market. the following places: Argentina — Republica, Tortuguitas, General
Lagos; Brazil — Camaçari, Demarchi, Guaratinguetá, Indaiatuba,
Impulso Dínamo, from Libertate (Argentina, Malvinas Argen- Jaboatão dos Guararapes, Jacareí, Morumbi and Santo Antônio de
tinas): The project provides technical training for young people Posse; Colômbia — La Calera; Chile — Concón, Carrascal and Pu-
with disabilities. One of the modules of this training includes dahuel; Peru — Lima and Callao. In 2018, employees carried out 57
digital tools, taught by a disabled instructor. With the proper training they actions in 2018 together with 38 institutions and impacted more than
can achieve their goals. 29,000 people.
Good use of money, from Nuestras Huellas (Argentina, Coordinated by the BASF Stiftung (BASF Foundation) in Germany,
Malvinas Argentinas): The project focused on strengthening Christmas Donation Campaign collected donations for the Uni-
businesses created by entrepreneurial women, generating genuine ted Nations Children’s Fund (UNICEF). In 2018, BASF supported a
sources of employment through financial tools workshops. project spearheaded by the U.N. Children’s Fund (UNICEF) to pro-
mote inclusive education in Peru with its annual year-end donation
Apresto Laboral, from Actitud Lab (Chile, Quinta Normal): campaign to the BASF Stiftung. BASF doubled all donations by em-
The project supported about 300 technical vocational education ployees of participating German and South American Group com-
students to be integrated into the labor market. With the support panies, bringing the total amount benefiting the children in Peru to
from BASF volunteers, the initiative helps these young people by €567,926.64.
offering tools such as curriculum development, preparation for job
interviews, and more.
Strengthening of Recycling, of Nazca (Chile, Quinta Normal):

The project strengthened the work of recyclers, promoting the im-
provement and professionalization of the management of green
points, in selective collection. Focused on recyclers, it contri-
buted directly to the updating of the recycling system and promote
better working conditions, as well as the creation of a high standard
and low cost recycling system.

Maria Aparecida de Almeida Valadão sensitizes the community about vertical gardens.
BASF as a responsible neighbor Ecological Walk — on the Porangaba Trail, of the Community
Council of the Resident Owners of the Ecological Village
BASF seeks to establish and strengthen channels of dialogue in the “Porcaraba Farmers’ (São Bernardo do Campo) it has the
neighborhoods around our production sites, based on the Responsible objective of keep the road clean and to unite the community
Action Program. through the practice of physical activity, preserving the environment
and mproving the health and quality of life of those involved.
Founded in 2000 in Guaratinguetá (SP, Brazil) and São Bernardo do
Campo (SP, Brazil), the Community Advisory Panel (CAP) is a Sustainable Community Garden, of the Association of
channel for dialogue between the company and the communities Residents of the Jardim do Vale I Neighborhood (Guaratin-
located around the two largest BASF sites in South America with the guetá) it offered a means to improve the quality of the food of the
objective of discussing matters of common interest related to envi- target people encouraging the cultivation of vegetables in an econo-
ronmental protections, health and safety. They are made up of BASF mic way.
professionals from the areas of Communication, Safety and the
Environment and representatives of different segments of society, The project More Green More Life carried out environmental
such as public bodies, neighborhood associations, non-governmen- workshops and vertical vegetable and PET bottles gardening
tal organizations (NGOs), class entities, schools and health clinics. techniques to sensitize the community to general and specific
Participating institutions can present projects focused on health, safety environmental issues in the region. In addition, it is possible to
and the environment to support the company. Three projects were experience the feeling of getting in touch with the land and with the
supported in 2018: production of food.

Sustainability governance Accelerator products make a substantial sustainability contribution

in the value chain. This is why we will pursue a new, ambitious goal
To ensure the implementation of the sustainability strategy and its from 2019 onward: We aim to make sustainability an even greater
continuity, committees from different levels of the organization were part of our innovation power and achieve €22 billion in Accelerator
established. The Sustainability Committee is responsible for defining the sales by 2025.
sustainability goals in South America, aligned with the company’s global
guidelines, monitoring and ensuring the implementation of the proposed To achieve this goal, we will deeply integrate Sustainable Solution
actions. Six thematic committees (People, Environment, Value Chain, Steering into the research and development pipeline, in business
Social Engagement and Communication) are responsible for spreading strategies as well as in merger and acquisition projects.
the vision of the strategy in the different areas of the company and local
committees act in the implementation of the strategy in the regions We largely achieved our previous goal of increasing the proportion
where the largest factories are located. of sales from Accelerator products to 28% by 2020 at the end of 2018
(proportion of sales in 2018: 27.7%).
Sustainability in practice For more information on Sustainable Solution Steering, see basf.com/en/sustainable-solution-steering
To present alternatives on how to build a society with more

possibilities and collaboration, in 2018, BASF started the dissemi-
nation of several examples of sustainability in practice in South 27.7%
(2017:27.7%) Accel
America. They showed that it is possible to combine productivity era
and sustainability, whether in the development of ecovio ®, a to
biodegradable and compostable plastic produced from corn
r
Pe
starch; through specialties based on certified palm oil (see RSPO
r
on page 31), a raw material present in cosmetics and food; energy
for
efficiency actions and the Mata Viva® program, which allowed for
Sustainable
m er Tr a
the reforestation of the banks of the Paraíba do Sul River within the
Guaratinguetá Chemical Complex, as well as solutions for the
construction sector that contribute to reducing water consumption. Solution
Steering
nsi ti
basf.com/br/pt/who-we-are/sustainability/Sustentabilidade-na-Pra-tica.html
Campo Limpo Reciclagem e Transformação de Plásticos S.A. is a
on
company created to generate the economic self-sustainability of
er
the reverse logistics system of agrochemical packaging, thereby Ch
closing the packaging management cycle within the chain itself. all
e ng
Conceived by the National Institute for the Processing of Empty
66.9%
ed
Packaging, inpEV, Campo Limpo has 30 shareholders, with BASF
(2017:67.8%)
holding 9% of the shares. In 2018, inpEV reached the milestone of 5.3% 0.1%
500,000 tons of empty agrochemical packages disposed of in an (2017:4.4%) (2017:0.1%)
environmentally friendly manner, since the beginning of the Campo
Limpo System operations in 2002. With consistent results achieved
in recent years, the Campo Limpo System correctly disposes of Accelerator: Substantial sustainability contribution in the value chain
approximately 94% of the primary plastic containers (ones that Performer: Meets basic sustainability standards on the market
come into direct contact with the product) marketed in Brazil, this Transitioner: Specific sustainability issues which are being
percentage being the best performance worldwide. actively addressed
Challenged: Significant sustainability concern identified and action
Sustainable portfolio plan in development
Figures for 2017 have been restated due to the agreement between BASF and LetterOne to
The company is committed to understanding the evolving merge their oil and gas businesses
expectations of society and customers. The each step of the value

To learn more about how we combine productivity, sustainability and business, access stories and watch
chain is evaluated from start to finish in order to achieve a balance videos at: basf.com.br
between economy, environment and the needs of society. By the
end of the 2018 business year, BASF globally had conducted
sustainability assessments and ratings for 96.5% of its entire relevant
portfolio of more than 60,000 specific product applications – which
account for €56.2 billion in sales.

Partnerships
Successful partnerships
On a daily basis, we confirm our commitment to provide BASF works to contribute to the success of its customers. To do this,
solutions to our customer’s needs, increasingly contributing it aligns its businesses in order to bring the best solution to the needs
to the increase of productivity, profitability and sustainability of the customers and, thereby, positively impacting their results.
of their businesses.
Through close partnerships with customers and research institutes,
Suppliers it brings together expertise to jointly develop custom products,
functional materials and system solutions, as well as processes and
BASF develops and implements global initiatives to encourage technologies.
suppliers and promote sustainable practices. Through the initiative
Together for Sustainability (TfS), the company analyses a supplier’s A very important relationship program in the area of Solutions for
sustainability performance against a set of assessment and audit criteria, Agriculture, ELO, focuses on the largest producers directly served
tailored to the requirements of a large group of chemical companies. It is by BASF. After analyzing the needs of each customer, the sales
based on recognized best practices and protocols, such as the United representative can offer customized solutions that contribute to the
Nations Global Compact and the Atuação Responsável Program®. increase of productivity and profitability.
In its 10th edition, the BASF Suppliers Excellence Award highlighted In 2018, BASF’s first eco-efficient house in Brazil, CasaE, completed
innovative projects and actions that contributed to the development of five years of encouraging sustainable development in the construction
supply chain. The Awards were attended by 15 supplier finalists (Brazil) sector. During this period, it had more than 18,000 visitors, among
who presented Cases regarding Innovation, Digitalization and students, engineers, architects and other professionals, who got to
Sustainability in a Pitch format. The selection criterion was: performance, know more about the proposals presented in the space.
TfS and evaluations from buyers.
To maintain itself as a living catalog, since its inauguration, the house
Momesso Industria De Maquinas - Equipment And Materials has undergone two renovations focused on residential automation
Montevale Montagens - Services and digitalization. Today, it is possible to carry out a visit with total
Vasitex Vasilhames - Packaging autonomy, be it through smartphones, interaction with the solutions,
Oxiteno Sa Industria e Comercio - Raw Materials choice of information to receive, among other possibilities.
Cia De Navegação Norsul - Shipping Companies
Transportes Toniato - Transportation CasaE was built with solutions that meet demands such as reducing
Vopak Brasil - Storage water and energy consumption, ensuring thermal and acoustic
comfort, and increasing the productivity and durability of buildings.
The 400m² project has about 30 partners, who increase the proposal
by contributing with solutions that include decoration, equipment
Diversity and inclusion and different technologies.
Through a partnership with Integrare — Center for Business The events of the Digidays, held in various business units, presented
Integration, which aims to connect small minority group the company’s novelties in technology and innovation, strengthening
companies (people of various races, indigenous people or and stimulating digital culture among employees and business
PCDs — people with disabilities) to large institutions — BASF partners. The company’s main digital projects, such as Go to Market
seeks to promote diversity and inclusion in the entire and AgroStart, highlight how technology is changing BASF’s way of
production chain. creating chemistry for a sustainable future.

Sales Academy to strengthen the sales force.
At Business Center North, the company is committed to consolidating a

strong technical and commercial sales force. It was there that we started
the Sales Academy for our marketing and sales employees, focusing
on their skills to deliver even more added value to customers by
contributing to their performance and delivering more sustainable
solutions. Suvinil Além da Cor transforms the Museum of Tomorrow
(RJ, Brazil) by coloring ideas and projects.
Our refinishing paints unit, Glasurit®, inaugurated the first Body
Panels Skills Center with a paint company. In order to contribute They believe that through color, they are able to transform people’s
to the development and professionalization of our customers, we lives, attitudes and their relationship with the environment. Eleven
have created a comprehensive training program, consisting of three actions were carried out in 2018, including the Gigantes do Mar
modules. Considering a limited number of technical schools or murals at the Catavento Museum and São Paulo Aquarium (SP) as
training centers that carry out these activities, the partnership brings well as the Rio de Janeiro Aquarium (RJ). The Museum of Tomorrow
the opportunity to the customer to offer a more qualified workforce. (Rio de Janeiro, RJ) also benefited with the receipt of 7,200 liters of
To achieve this, the company associated itself with the manufacturer the Suvinil Sempre Nova product, in the color white, for two years.
of equipment and tools for the Spanesi workshops, which provided The objective is the maintenance of the painting of the internal and
the equipment and know-how. external areas of the space, a necessary action due to the large
number of visitors. Suvinil Sempre Nova paint was chosen because
Suvinil, BASF’s brand of premium decorative pains, maintains a it has a sustainable action built in: it chemically causes the rain to
platform of sponsorships and partnerships to be able to put color remove the dirt particles, thereby avoiding the need to frequently
in different ideas, projects and locations — Suvinil Além da Cor. wash the facades and saves water.
Sales Academy prepares professionals and creates even more

value for customers.

Digitalization BASF’s portfolio or from participating in company campaigns and

events. These points can later be exchanged for services and
As part of its digital transformation strategy, BASF started solutions, such as training and consulting, that will assist the farmer
the fourth industrial revolution in its operations in Brazil: in the management of the crop and thus contributing to the
digitalization of processes, known as Industry 4.0. longevity of the business. It is also possible to choose to exchange
the points for prizes or to request sustainability studies customized
The strategy offers opportunities for growth and differentiation for by Fundação Espaço ECO (FEE), measuring the environmental,
BASF, with the potential to positively influence sales, productivity social and economic impacts of agricultural production.
and safety throughout the process. Digitalization is enabling the
company to get closer to its customers, especially the medium and At shop@BASF (shop.basf.com.br and shop.basf.com.ar), an
small ones, breaking paradigms and showing how digitalization interactive platform, that is agile and easy to use in Brazil and
can also bring benefits in the B2B market. Argentina, customers in the Personal Care area have access to the
company’s portfolio in a totally virtual platform, with more than 100
BASF’s Solutions for Agriculture Division launched the Agrega products for immediate purchase.In addition to the e-commerce
program in August, with unique solutions and services that service, this pilot project brings specific content to the customers,
contribute to the legacy of the farmer, mainly in three pillars: such as articles on market news and trends, new formulations and
business, family and society. innovations, sales campaigns, ingredient information and specialized
online technical service. Thus, in addition to purchasing solutions
By joining the program to the digital platform, the farmer for cosmetic and personal care products, the client can also perform
accumulates points that are obtained by buying products from consultations and receive advise from specialists.
Boldness and innovation to participate in Black Friday.

“With shop@BASF, we bring ourselves Presenting BASF’s diversification in innovative solutions, expanding and
strengthening the relationship with customers motivated the company to
participate in the Black Friday promotional action. In an unprecedented
closer to our small and medium-sized way, the company offered its portfolio through a digital platform to a wide
customers, developing a direct relationship variety of manufacturers from different industries, in South American
channel. Digitalization challenges countries. Ingredients and raw materials were made available for
us to rethink our business and is manufacturers of personal care products, home care products, solutions
for the automotive industry and paint manufacturers.
modernizing our way of working in
a pleasantly surprising way. For this action, the company opted for sustainable freight, with the
”
Antonio Lacerda, Senior Vice President of Chemicals,
possibility of neutralizing their carbon footprint, which was available for
the first customers who finalized their purchases. For this, BASF
supported the reforestation of an Atlantic Forest area which would have
Performance Products and Sustainability the capacity to neutralize the equivalent amount CO2 that would be
emitted by the freight.
AgroStart Program
In less than two years, the AgroStart program has received more than 340 registrations of start-ups from 10 countries in Latin America.
During this period, teams from BASF and ACE — a partner company, focused on fostering innovation and entrepreneurship through
investments and accelerations of start-ups — evaluated solutions ranging from the application of inputs through the use of drones,
climate monitoring systems, management tools, even pest and disease detection.
The program is part of the BASF Digital Agro strategy, which is being implemented throughout Latin America, with the
purpose of providing digital solutions (agTech) that provide benefits to the entire agribusiness chain through the Internet of Things (IoT).

Acknowledgements
In 2018, BASF received 31 acknowledgement awards for its innovation and sustainability activities in South America. Presented by
associations, press and customers from different sectors such as automotive, cosmetics, construction, among others.
In the area of sustainability, 14 acknowledgment awards in Brazil, Argentina, Chile and Peru were received. Innovation related
activities have also been recognized in Brazil, Chile and Colombia. NAID (National Association of Industrial Development) placed BASF
in 1st place in Bogotá and Cudinamarca in the Innovation Ranking 2018, and in 7th place in Colombia. In Chile, BASF was selected as
“Best Company to Innovate”, according to the Best Place to Innovate ranking. In addition, the company was recognized by three
awards as one of the best companies in the chemical industry to work for.
Award Organizer Country

Mejores Empleadores 2018 Revista Apertura Argentina
Stakeholder Relationships Amcham Argentina
Contribution to SDG 8 Ceads Argentina
Working with the Forge Foundation and Inclusive Space Foro Ecumênico Social Argentina
REI - Auto Parts & Systems Automotive Business Brazil
Qlicar - Social and Environmental award Natura Brazil
Golden Supplier Award Boticário Brazil
Sustainability FCA Brazil
Social Responsibility and Financial Responsibility MRV Brazil
FIESP Environmental Merit Award FIESP Brazil
5th Global Awards Avery Dennison Brazil
Exame's Biggest and Best Exame Brazil
Valor Innovation Valor Econômico Brazil
The Best by Dinheiro IstoÉ Dinheiro Brazil
Época 360º Época Brazil
Exame Sustainability Guide Exame Brazil
Estadão More Companies Estadão Brazil
Indeed Indeed Brazil
Brazil Leaders Award LIDE Brazil
Supplier Award Aché Brazil
Você AS Revista Você AS Brazil
Entrepreneur of the Year EY - Ernest Young Brazil
Digital Maturity Index Value Jornal Valor Econômico Brazil
Desde el Trabajo Construimos Salud Mutual de Seguridad CChC Chile
Best Place to Innovate GFK Adimark, Universidad Adolfo Ibáñez Chile
Sustainable Initiatives 2018 Award HUB de Sustentabilidade da La Tercera Chile
Best Place Bogotá and Cundinamarca – Most innovative company ANDI Columbia
Ecovio ® Most Sustainable Product of the Bogotá Fair Feira Internacional de Bogotá - Corferias Columbia
30Under30 GreenBizz Global
Company Committed to the Environment Claro Peru
500 best projects Latin America and the Caribbean Premio América Latina Verde South America

Digital transformation
Under the banner of “Smart Manufacturing” BASF
evaluates opportunities for a more intensive use of
digital technologies and applications in its plants
with the goal of making production more efficient
and even safer.
44
Our contribution to the SDGs
Our contribution UN Global Compact
to the SDGs The company has been supporting and participating in the Global
Compact since 2000, currently serving as the vice presidency of the
We are guided by the connection existing between people. Brazilian Board of the Global Compact. In 2018, it was recognized
Connection means good relationships: between us and our during the Summit of Leaders of the United Nations Global Compact
customers and partners. This is reflected in multi-disciplinary (UNGC) as a Global Compact leader. Recognized in 2018 as an SDG
and global projects and customers events, through our social Pioneer for innovative solutions and initiatives driving sustainable
commitment and other initiatives, where the focus is on the water and climate action.
association of individuals and knowledge in order to solve global
issues and give rise to a sustainable future for all of us.
BASF contributes to a sustainable future with its innovations. We support the United Nations in the implementation of the UN
Sustainable Development Goals (SDGs), which create the framework for sustainable business practices at the economic, social
and environmental levels.
BASF supports the 17 proposed objectives and contributes strongly to six of them through its business. These are: Clean water
and sanitation; decent work and economic growth; responsible consumption and production; affordable and clean energy;
industry, innovation and infrastructure; and climate action.

Our contribution to the SDGs
Ellen MacArthur Foundation ECO Space Foundation (FEE)

BASF participates in Ellen MacArthur Foundation programs to further Instituted and maintained by BASF since 2005, the ECO Space
develop its existing circular economy solutions. A concept of intelligent Foundation acts as a consultancy for sustainability. It develops
circular economy has to be integrated into product development, customized projects for organizations to measure and understand
production processes, use and reuse of systems from the outset. the environmental, social and economic impacts of their products
and processes — based on Life Cycle thinking.
Circular economy proposes to rethink the way of producing and
designing products that can be designed for remanufacturing and Through unique methodologies, it diagnoses, measures and
thereby feed the system with renewable energy. It is based on three co-creates solutions that transform sustainability into concrete
principles: eliminating waste and pollution, keeping products and indicators, materializing the benefits it brings to business, in order to
materials in cycles of use, and regenerating natural systems. support managers in their strategic decisions and to make citizens
aware of their choices.
“Wofhenever we increase the useful life

the products and the recycling of them
It also offers solutions that aim to support sustainability certifications
and protocols, environmental conservation projects and the design
we are talking about circular economy. and measurement of the impact of social and environmental projects
— contributing to the optimization of resources.
And many of our solutions are developed
Find out more about FEE at espacoeco.org.br/
according to this concept.
”
Emiliano Graziano,
Manager of Corporate Sustainability at BASF
Commitments
We provide extensive information on all our chemical products sold

to our customers with safety data sheets in around 40 languages.
inpEV
This is achieved with the help of a global data base in which we
maintain and evaluate continuously updated environmental, health
BASF is actively involved in the National Institute for the Processing
and safety data for our substances and products. We train and
of Empty Packaging, a non-profit organization created with the ob-
support our customers in fulfilling their industry or application-specific
jective of promoting the correct disposal of agricultural pesticides
product requirements. In associations and together with other manu-
empty packaging.
facturers, BASF is pushing for the establishment of voluntary global
Thanks to the organization’s performance, Brazil is a worldwide
commitments to prevent the misuse of chemicals.
reference in the environmentally correct disposal of the material,
sending 94% of primary plastic packaging (which comes into direct Our risk assessment goals support the implementation of initiatives
contact with the product) for recycling or incineration. such as the Global Product Strategy (GPS) of the ICCA.
To learn more, visit basf.com.br
Ethical business pact against corruption
In 2018, on International Day Against Corruption, celebrated on the

9th of December - when more than 100 countries signed the UN
Convention Against Corruption in 2003 - the company joined the
United Against Corruption movement, which aims to mobilize society
through dissemination of transparency and integrity practices.
To learn more, visit the site International Transparency
Fundação Espaço ECO (Eco Space Foundation) — São Paulo (SP, Brazil):
measuring and understanding environmental, social and economic
impacts.

Environmental Protection, Health and Safety
Environment
Conservation of natural resources is essential
to ensure the sustainability of the forest and is
aligned with the United Nations (UN) Sustainable
Development Goals (SDG) – to promote inclusive
and sustainable industrialization (SDG 9), to
take urgent measures to combat climate change
(SDG 13) and protect the sustainable use of
terrestrial ecosystems (SDG 15).
47 BASF In
in South America Report 2018
Environmental Product life cycle
Protection, Health and The initiative Demarchi+Ecoefficient aims to measure and

optimize the paint production processes at the São Bernardo do
Safety Campo (São Paulo) site, focusing on continuous improvement and
the implementation of increasingly eco-efficiency management. It
analyzes the entire value chain, encompassing 10 initiatives related
BASF continuously seeks improvements in its operations that to the optimization and reuse of raw materials, improvements in the
will provide efficiency and contribute to sustainability. This logistics chain, energy efficiency and the conscious use of water
includes reducing the use of raw materials, energy and water, resources. Improvement projects prevented the emission of 963 tons
as well as optimizing production processes, generating less of CO2 in to the atmosphere, which is equivalent to 18 laps around
waste and evaluating its recycling. the Earth with a truck, and has also contributed in reducing the
consumption of electricity by 15% between 2010 and 2016.
Certifications
In 2018, an awareness campaign aimed on increasing employee
BASF achieved the ISO 50001 international certification, one of the engagement in environmental issues, with the reduction of the
most important in the energy segment, for 100% of their operations consumption of water, energy and natural resources both inside and
in the town of Guaratinguetá site, becoming the first major chemical outside the company.
company to receive this certificate in Brazil.
The company continued their work to adapt to the new version (2015)
of ISO 14001, achieving certification. Among the Examples of good
practices encountered during the external audit include investments
in the Guaratinguetá Effluent Treatment Station (ETS) as well as a
reduction in the amount of sludge generated that is destined for
disposal in landfills; perspective of the life cycle considering
environmental aspects throughout the value chain; mapping of the
environmental context of the operational divisions, stakeholder
needs and expectations, and risk assessment for environmental
issues.
Also worthy of note was the Zero Landfill program which aims
to find more sustainable alternatives for the disposal of solid
waste. At the Jaboatão dos Guararapes (PE) site, the alternatives
developed allowed to reduce the amount of solid waste that
would have been destined for landfills. Started in 2015, the project
has already avoided 6,637 tons of waste from being sent to
landfills (December 2018 data). Eco-efficient management: employee engagement.
In 2018, BASF launched a project to manufacture products

based on chemically recycled plastic waste. In the
ChemCycling project, the company uses oil made from
plastic waste as raw material, thereby creating value for the
environment and society. During the pilot stage, BASF’s
customers from various industries have already produced
items from chemically recycled plastics that included dairy
products packaging, refrigerator shelves and thermal
insulation panels.

Waste Waste recycling rate (Brazil, %)
2018 82
Of the total amount of waste generated, only 18% is currently sent
2017 75
to landfills or to be incinerated. The Zero Landfill program contributes
2016 74
heavily to meeting our goal of having high waste recycling rates,
following the National Solid Waste Policy and the global Environmental
Protection requirements of BASF. Other initiatives, such as the
burning of waste which has a high calorific value in the boiler at
Camaçari for the generation of steam, also adds to these significant
results.
8th World Water Forum

During the event held in Brasília (DF), BASF reinforced its commitment to sustainability and signed the Brazilian Business
Commitment for Water Safety. The agreement seeks the commitment of Brazilian companies to implement of circular water
management in their industrial processes by means of strategies that deal with the prevention of risks related to the resource.
The document signed during the 8th World Water Forum is composed of eight commitments:

Mitigate the business’ water risks

Have water in the business strategy

Measure and communicate water management within the company

Take care of transparency and reputation

Encourage collaborative projects

Promote engagement throughout the chain

On an annual basis report about the actions, targets and commitments assumed in the Platform of the Brazilian Business Commitment
for Water Security

Drive corporate actions to build a community of best practices using tools and resources related to watershed management, reuse and
agriculture.

Water Water used for cooling (total) (Brazil, millions of cubic meters/year)1
2018 134,2
We are looking for ways to address water scarcity and the 2017 144,5
need to ensure the availability and sustainable management 2016 140,0
of water, in line with the Sustainable Development Goals 1

The water destined for the cooling towers of Camaçari and Guaratinguetá together represent
(SDG). The company works to reduce the consumption of 80% of the volume of water. Thus, we can consider a reduction that is proportional to the
production at these locations.
water in its productive units through techniques such as
reuse, as well as the identification and elimination of waste. Water used for production (total) (Brazil, millions of cubic meters/year)
One of the company’s goals is to reduce the cubic meters of 2018 1,9
water used per ton produced in South America by 25%, by 2017 1,9
2025 compared to 2016. 2016 1,8
BASF’s water management strategy includes the efficient use of

water and the development of sustainable solutions to local water Since 2014, BASF has already invested €15 million in the effluent treat-
problems. Since the start of the program in 2010, BASF reports ment system at the Guaratinguetá site, using modern technology that
issues related to water management to the Carbon Disclosure combines the efficiency and reliability of the treatment of effluents with
Project (CDP). Globally, BASF achieved a rating of A- in 2018 and energy efficiency and minimization in the use of supplies.
thus leadership status for sustainable water management.
In Chile, where 60 percent of available water is used for industrial and
agricultural purposes, BASF applies water resource management
A reduction of tools which are aligned with the overall goal of sustainable water use
in areas that are prone to water scarcity. In relation to water capture,
55% there was a reduction of 17% from 2017 to 2018 in the Concón area.
Emissions of organic substances in the water (Brazil, tons COD1 per year)
in water consumption per ton produced 2018 254

in South America between 2002 and 2018 2017 362
2016 357
1
COD = Chemical Oxygen Demand
Since 2010 BASF has supported the program Water producer,

developed in partnership with the Guaratinguetá City Hall and the Emissions of Metals1 in the water (Brazil, tons of metals per year)
Espaço ECO Foundation (EEF), which aims to increase water 2018 1,1
availability in the Guaratinguetá River Basin — which is responsible 2017 0,9
for 95% of the public water supply of the municipality. The initiative 2016 1,4
provides for practices and management of soil conservation, 1
Metals = As, Cd, Cr, Cu, Hg, Ni, Pb, Zn
recovery of riparian forests and the protection of remnants of native
vegetation and springs. Nitrogen emissions in the water (Brazil, tons of nitrogen per year)
2018 19
Water captured (total) (Brazil, millions of cubic meters/year)
2017 22
2016 40
2018 2,8
2017 2,8
2016 3,0
The volume of water consumed takes into consideration the water that is taken from surface
water sources (rivers), underground sources or the public network.

Energy Electricity consumption (Brazil, MWh)
2018 269.324
The efficient use of energy is a priority for BASF. The company 2017 272,434
maintains a continuous improvement process, with regular 2016 255,5711
energy policy assessments, targets and action plans to
1
There was a correction to the amount of electric energy imported in Gta 2016
increase the energy efficiency of the South American sites by
7% (reference year 2016) by 2025.
Steam consumption (Brazil, metric tons)
It started in the Chemical Complex of Guaratinguetá, in partnership 2018 457,232

with Universidade Estadual Paulista (UNESP), the Triple E (Excel- 2017 433,475
lence in Energy Efficiency) project aims to improve the energy and 2016 380,1471
sustainability indices in the company, in addition to increasing its 1
The steam consumed takes into consideration that which is imported and domestically
competitiveness in South America - the project completed three generated (except that which is destined for export).
years in 2018.
Fuel consumption (Brazil, MWh)1
Currently, the project is underway in the Guaratinguetá, Demarchi,
2018 193,494
Camaçari, Jacareí and Indaiatuba units in Brazil; in General Lagos,
2017 189,767
Argentina; and Concón, Chile.
2016 181,739
With the implementation of 118 projects, the initiative will allow for The indicator shows the consumption of fuel exclusively at the Power Plants
a savings of €2.8 million and a reduction of 6.9 thousand tons of

CO2 equivalent per year.
In Guaratinguetá, a project for burning process waste
TripleE was able to achieve the unprecedented international gases in the boiler in the dispersion unit was completed in
ISO 50001 certification for the Guaratinguetá Chemical Complex, the January 2018.
first one ever awarded to a large chemical industry in the country.
Approximately €2.1 million was invested to further reduce our
environmental impacts. Instead of sending the gases formed
“TripleE actions will further by volatile organic compounds into the atmosphere after go-
ing through a gas scrubber, they are sent via a pipe line to be
burned and destroyed in the boiler.
reduce CO2 emissions in South America,
in line with the new corporate climate target
for carbon neutral growth until 2030.
Reductions in fuel, steam and
electricity consumption automatically
reduce CO2 generation.
”
Vera Felbermayer, Vice-President for Technical
Services and Infrastructure in South America
Excellence in Energy Efficiency Project

Reduction of
6.9 tons/year
of CO2 equivalent
Chemical Complex in Guaratinguetá (SP, Brazil).

Emissions
Protecting the environment is a priority for BASF. As a leading
chemical company, we want to achieve CO2-neutral1 production
growth from 2019 to 2030. We have articulated this commitment
in our new climate protection goal, which will apply from 2019.
In order to reach this target, we aim to maintain total greenhouse
gas emissions from our production sites and our energy
purchases at the 2018 level. Sharp increases due to the startup
of large-scale plants will be progressively offset. We will
compensate for additional emissions with optimization measures
at existing plants and a focus on purchasing low carbon energy.
When deciding on investments and acquisitions, we systematically
consider the effects on greenhouse gas emissions.
The Mata Viva® program contributed to the reforestation of about
Globally, BASF has already reduced its greenhouse gas emissions 132 hectares of green area at the Chemical Complex of Guaratinguetá.
by 50% in absolute terms compared to the 1990 levels — while its
production volumes have doubled over this period. The project contributed to the removal of carbon from the atmosphere,
which was equivalent to 33.5 thousand tons. This net carbon removal
Emissions of pollutants1 in the atmosphere/year (Brazil, tons of
pollutants per year) was valued at approximately € 1.085 million.
2018 216
This study to assess the benefits brought in terms of global climate
2017 232
regulation through the investments made in the recovery of the area
2016 240
was done using the Cost of Replacement Method (CRM), considering
1
Pollutants: CO, NOX, NMVOC, SOX, dust, NH3/other inorganics
the Social Cost of Carbon (SCC).
Emissions of Greenhouse Gases (Brazil, tons of CO2 equivalent per year)
2018 102,746 Health

2017 95,280
2016 91,0291 Our worldwide standards of occupational medicine and health
protection are specified in a policy implemented by a global ne-
twork of specialists.
Forest
In Chile, the health campaign was taken to the community through
In 2018, BASF completed the last phase of the Mata Viva® training and lectures in community schools of Carrascal, such as
Reforestation Master Plan with the objective of increasing Escuela Angelmó, Aconcagua, Jarin Membrillar. This project was the
forest biodiversity. The Mata Viva® program, which began in reason the company won the leading health protection company
1984 at the Chemical Complex of Guaratinguetá, contributed award granted by Mutual de Seguridad.
to the reforestation of about 132 hectares of forest with native
species, totaling 278 thousand trees planted along 1.4 km of We measure our performance in health protection using the Health
the river Paraiba do Sul. Performance Index (HPI), which has five components:
A study of the biomass stored by Mata Viva® was carried out in 2011, Recognized occupational diseases
calculating the amount of carbon present in the aerial part of the forest, Medical emergency preparedness
in the plant litter and in the soil, this is done in an area equivalent to the First Aid
use and occupation of the soil prior to the restoration activities to serve Preventive medicine
as baseline study. Health promotion
Each component contributes a maximum of 0.2 to the total score.

Net carbon removal was valued at approximately The highest possible score is 1.0
€1.085 million
HPI global in 2018

1 BASF operations excluding the discontinued oil and gas business. The goal includes other
greenhouse gases according to the Greenhouse Gas Protocol, which are converted into CO2
equivalents.
0.96
Global Health Campaign: Life.Saving.Heros Safety

In 2018, the Global Health Camapign: Life.Saving.Heros aimed to BASF has a very strong commitment and responsibility to
sentisize employees about the importance of cardiopulmonary safety, this applies to our own employees, contractors and
resuscitation. With the theme Life.Saving.Heroes. the company the communities in which we operate. For the company,
held a series of first aid training sessions. In addition, it provided safety is a value which must be lived at all times and in all
information and videos through an exclusive electronic channel, places (inside or outside the company).
which also “invited”employees to participate in a quiz. Interactively,
they could also upload their videos, highlighting their performance. The Internal Workplace Accident Prevention Week (SIPAT), whose
main theme was “Identify the risk. Act!”. had 12,000 participations.
Health of the community The employees and contractors were invited to co-create during
the event, and participated with the production of 83 videos,
BASF joined the Desarrollo y Paz del Cesar Program in La answering the question: “Why is Security important to you?”
Guajira, Colombia. They delivered to the Wayú Alewa community
located on the border between Cesar and the La Guajira commu- The “Programa Estrela de Segurança (Security Star Program)” of the
nity — 100 Interceptors® (a long-term insecticidal network). With Camaçari Acrylic Complex (BA, Brazil), which reinforces safe
this donation, BASF confirms its commitment to the country’s most behavior through the application of the promotional practices of
vulnerable communities, contributing to the eradication of vectors observation, speech and participation, which obtained recognition
that cause yellow fever and malaria. in Safety Awards 2018. Activities were conducted by BASF leaders
and safety technicians addressing safety issues such as behavior,
Another 500 mosquito nets were delivered in support of the Health, proper use of personal protective equipment (PPE) and the safe use
Hygiene and Environment training program. The program is run by of tools.
young leaders from five rural municipalities that are in a vulnerable
situation. These young leaders are in charge of delivering the Inter-
ceptors® to their communities, contributing to their well-being. Lost-time injury rate 2018 (Brazil; BASF, temporary
employees and contractors)
0.15
per 200,000 working hours
Employees and contractors regularly meet to discuss safe behavior.

Employees
Inspiration
A work environment that inspires and connects
people, providing the development of diverse
personal skills and technical knowledge. The
company encourages its employees to contribute
with their creativity and potential.

Employees
Employees Attraction, Training, and Development
The employees are key to the success of the company. BASF Attracting and developing the best talent is crucial to our success. In
ensures that employees have the tools needed to perform 2018, our 2019 Trainee Program had more than 15,000 registrations
their activities with excellence in a work environment where for 18 vacancies, of which 15 were to work in São Paulo (SP, Brazil) and
flexibility and delivery of results are valued. the other three to work in each of the South, North and West Business
Centers. In addition to this, we also launched the Engenheiros do
The company constantly invests in training and development of its Futuro (Engineers of the Future) Program, an initiative for the valorization
teams, taking into account the tendencies of the markets that they of young talents from Bahia and the countryside of São Paulo, for our
act in. All this effort that was focused on BASF’s work teams in the factories in Camaçari (BA) and Guaratinguetá (SP). To improve the
region resulted in important recognitions in 2018. employee’s experience and to foster a lifelong learning culture, BASF
launched the Go2Learn platform. The tool allows employees to access
Você SA magazine - Best Companies to Start a Career: various open contents, as well as the portfolio of training offered, thus
Revista Apertura (Argentina) - Best Employers 2018 - position 10 reinforcing the importance and self-development of the employee. In
(category of between 200 and 1,000 employees) addition to this, new initiatives and trainings were created to strengthen
Best Company to Work for, by Você S/A magazine. First place in the Chemical the organization’s digital skills.
and Petrochemical category and highlighted in diversity and sustainability
The 50 Most Beloved from Love Mondays For the third consecutive year, BASF continued to strengthen its
feedback culture, through the use of the Eu + lider tool, which
25 Best Companies to Work from Indeed
enables employees to have an open dialogue with their leaders.
Exame Sustainability Guide 2018 - Category Human Rights

Finding more practical solutions for everyday obstacles is the aim of the
Eureka suggestions program, which invites employees to apply the five
behaviors in the pursuit of task improvement. In 2018, more than 2,000
employee ideas and suggestions were received, and the suggestions
put into practice earned BASF a benefit of €1.72 million, and the program,
since its regionalization in 2009, has already accumulated €16.78 million.
Eureka program in 2018 (South America)
Ideas
registered 2,468
Benefits paid
to employees €142,445
“BASF stimulates its employees to be
protagonists of their careers and seek
the development thereof. In this process,
feedback becomes natural: whether it’s
from leader to employee or vice versa.
A culture of open management based on mutual trust, respect and
motivation. ”
Ewald Maier-Erhart, Vice President Human Resources

Employees
Since 1997, the BASF Award for Excellence for South

America contributed to a consistent cultural change in
the company, focused on excellence, it is made up of four
pillars: Excellence in Operations; Excellency in Functions;
Excellence in Marketing & Sales; and Excellence in Struc-
ture. In addition, it continues to disseminate the five key
behaviors, which synthesizes the expected behavior of all
who make up our team: owner attitude; team spirit; excel-
Open dialogue with the leaders contributes to development. lence in execution; customer focus; and people.
Demographic details In its 21st edition, the BASF Excellence Award stimu-
lates continuous improvement, always focusing on the
excellence. The employees participate and are recognized
Total number of employees per Business Center
in four categories: Excellence in Functions; Excellence in
2018 Brazil 4,239 68.6% Business; Excellence in Technical Functions and Excel-
Total North 179 2.9% lence in Productive Processes.
6,180 West 494 8.0%
South 1,268 20.5%
2017 Brazil 3.833 68.9%
Total North 155 2.8%
5.567 West 453 8.1%
South 1,126 20.2%
Employees by age (Brazil)
1 Up to 25 years 6.1% 4 1
3
2 From 26 to 39 years of age 55.0%
3 From 40 to 54 years of age 34.5%
4 55 years and older 4.4%
2
Women by age 4 1
3
1 Up to 25 years 10.8%
2 From 26 to 39 years of age 62.8% Flexibility and responsibility: Alex Santana, 32, works a few days a
3 From 40 to 54 years of age 23.3% week directly from his home in São Paulo (SP, Brazil).
4 55 years and older 3.1%
2 BASF has expanded the scope of the Equilibre Program (Balance
program), creating an even better experience to work with. The
same contributes to the sustainable balance between the needs of
30.1%
Women employed a highly competitive professional environment and its management
in South America facing the responsibilities of personal life. This results in greater
involvement, leading to the retention of leading professionals and
attracting new talent to BASF. Among the novelties is flex office,
28.9%
Women in leadership which offers the option of working twice a week at home, flexible
roles in South America1 time, it promotes alternatives related to the day to day and working
hours, allowing employees to organize their time in a way that is
more suited to their needs; and flex space, which allows the use of
new workplaces that generate greater convenience, savings in time
1 Excluding employees of the businesses acquired from Bayer and reduction of costs.

Employees
Launch of the WIB Group — Woman in Business at the São BASF signs commitment term and adheres to the Women’s
Bernardo do Campo plant (SP, Brazil). Empowerment Principles (WEPs).
Diversity 1st Inclusive Fair (Chile) to reinforce the importance of the theme
for about five thousand people.
For BASF, diversity is essential for business, since the sum of different
genres, sexual orientation, ethnic groups, ages, thoughts, drives BASF has also signed a collaboration agreement and is now part of
creativity and innovation and makes us more competitive. Pride Connection (Chile). In this context, the “Sal del Closer” activity
was carried out, led by Fundación Iguales. Through it, employees are
Diversity leads to the formation of the best team, since it allows for a invited to enter a closet where they hear testimony about different
more comprehensive performance (understanding the diversity of prejudices to raise awareness of how this affects our society.
the market) and, consequently, brings the best results.
The Diversity Circuit is a program started as a pilot program in the
With 26 questions, the Census on Diversity in South America, the Camaçari Acrylic Complex to bring diversity and inclusion to the
research aimed to outline a profile of the company’s professionals in the factories. For two days, the topic of diversity was reflected through an
region, to improve policies and to encourage diversity and inclusion. The agenda developed by the employees themselves, with the presentation
survey also invited participants to reflect on how diversity has been of cases, regional personalities and factory histories. The activities
observed in the workplace, analyzing various aspects related to the contextualized what diversity is from the local point of view.
theme, such as prejudice, inclusion and even the benefits provided
during the business development process.
The four existing Affinity Groups in BASF — WIB — Women in

Business, a gender issue; the BIG — Black Inclusion Group, racial
issue; the BY@B — Be Yourself at BASF, sexual diversity; and the
group of PCD employees (people with disabilities), who discuss
issues of accessibility and the increase of the population within the
company — meet constantly to discuss the themes and promote
inclusion. In 2018, BASF started to create specific programs beyond
these activities. Check out the highlights of the year.
The participation of the leaders was greatly encouraged. Thirty

groups undertook the Training about Unconscious Biases in
Brazil and five groups in Argentina. Unconscious biases are the set
of stereotypes we hold about different groups of people from
situations and experiences that we experience throughout our lives.
For BASF, taking the issue to the corporate world is essential for the Zumbi dos Palmares College
development of diverse teams.
BASF partnered with Zumbi dos Palmares College (São
BASF adhered to the Women’s Empowerment Principles Paulo, Brazil) and to hire 12 black interns through the Todo
(WEPs) created by UN Women Brazil and Rede Brasil Global Talento Program. The company took the entire recruiting
Compact. The event for the signing of the commitment agreement and selection structure into the college to design the program
took place at the company headquarters, on December 19. and the selection process. Those students selected are part
of a mentoring program and receive a scholarship during the
With the participation of representatives of the National Congress, two-year internship.
government ministers, customers, employees (with children with
disabilities) and BASF, among other big companies, the

Ten-Year-Summary
Ten-Year-Summary
Million €
2009 2010 2011 20122 20133 2014 2015 2016 2017 2018
Sales and earnings
Sales 50,693 63,873 73,497 72,129 73,973 74,326 70,449 57,550 61,2231 62,675
Income from operations (EBIT) 3,677 7,761 8,586 6,742 7,160 7,626 6,248 6,275 7,587 1
6,033
Income before income taxes 3,079 7,373 8,970 5,977 6,600 7,203 5,548 5,395 6,8821 5,288
Income after taxes from continuing operations – – – – – – – – 5,592 4,150
Income after taxes from discontinued operations – – – – – – – – 760 829
Income after taxes 1,655 5,074 6,603 5,067 5,113 5,492 4,301 4,255 6,352 4,979
Net income 1,410 4,557 6,188 4,819 4,792 5,155 3,987 4,056 6,078 4,707
Income from operations before depreciation

7,388 11,131 11,993 10,009 10,432 11,043 10,649 10,526 10,7651 9,166
and amortization (EBITDA)
EBIT before special items 4,852 8,138 8,447 6,647 7,077 7,357 6,739 6,309 7,6451 6,353
EBIT after cost of capital (226) 3,500 2,551 1,164 1,768 1,368 194 1,136 2,9021 825
Capital expenditures, depreciation and

amortization
Additions to property, plant and equipment and

5,972 5,304 3,646 5,263 7,726 7,285 6,013 7,258 4,364 10,735
intangible assets
of which property, plant and equipment 4,126 3,294 3,199 4,084 6,428 6,369 5,742 4,377 4,028 5,040
Depreciation and amortization of property, plant

3,711 3,370 3,407 3,267 3,272 3,417 4,401 4,251 4,202 3,750
and equipment and intangible assets
of which property, plant and equipment 2,614 2,667 2,618 2,594 2,631 2,770 3,600 3,691 3,586 3,155
Number of employees
At year-end 104,779 109,140 111,141 110,782 112,206 113,292 112,435 113,830 115,490 122,404
Annual average 103,612 104,043 110,403 109,969 111,844 112,644 113,249 111,975 114,333 118,371
Personnel expenses 7,107 8,228 8,576 8,963 9,285 9,224 9,982 10,165 10,610 10,659
Research and development expenses 1,398 1,492 1,605 1,732 1,849 1,884 1,953 1,863 1,8431 2,028
Key data
Earnings per share € 1.54 4.96 6.74 5.25 5.22 5.61 4.34 4.42 6.62 5.12
Adjusted earnings per share € 3.01 5.73 6.26 5.64 5.31 5.44 5.00 4.83 6.44 5.87
Cash flows from operating activities 5,693 6,460 7,105 6,602 8,100 6,958 9,446 7,717 8,785 7,939
EBITDA margin % 14.6 17.4 16.3 13.9 14.1 14.9 15.1 18.3 17.61 14.6
Return on assets % 7.5 14.7 16.1 11.0 11.5 11.7 8.7 8.2 9.51 7.1
Return on equity after tax % 8.9 24.6 27.5 19.9 19.2 19.7 14.4 13.3 18.9 14.1
Return on capital employed (ROCE) % – – – – – – – – 15.4 11.4
Appropriation of profits
Net income of BASF SE4 2,176 3,737 3,506 2,880 2,826 5,853 2,158 2,808 3,130 2,982
Dividend 1,561 2,021 2,296 2,388 2,480 2,572 2,664 2,755 2,847 2,939
Dividend per share € 1.70 2.20 2.50 2.60 2.70 2.80 2.90 3.00 3.10 3.20
Number of shares as of December 31 million 918.5 918.5 918.5 918.5 918.5 918.5 918.5 918.5 918.5 918.5
1 Figures for 2017 were restated with the presentation of the oil and gas activities as discontinued operations. For more information, see the Consolidated Financial Statements from page 200 onward.
2 We have applied International Reporting Standards IFRS 10 and 11 as well as International Accounting Standard 19 (revised) since January 1, 2013. Figures for 2012 have been restated; no restatement was made for 2011 and earlier.
3 Figures for 2013 have been adjusted to reflect the dissolution of the natural gas trading business disposal group.
4 Calculated in accordance with German GAAP

Further information
Further information
Contact in South America
Contact
HEADQUARTERS BASF Química Colombiana S.A.
BASF S.A. Calle 99 nº 69C 32, Bogotá – Colombia
Avenida das Nações Unidas, 14171, tel. 57 1 632 2260 – fax 57 1 634 2050
Morumbi, São Paulo, SP – Brasil basf.com.co
tel. 55 11 2039 2273 – fax 55 11 2039 2505
SAC Tintas Imobiliárias 0800 0117558 BASF Uruguaya S.A.
Produtos para Agricultura 0800 0192500 Luis Alberto Herrera,1284,
Serviço de Atendimento a Emergências 0800 0112273 World Trade Center, Torre A, Of. 801,
basf.com.br Montevideo – Uruguay
tel. 59 82 6281818
BASF Argentina S.A.
Tucuman 1, Piso 18 – C1049AAA, Buenos Aires – Argentina BASF Venezolana S.A.
tel. 54 11 4317 9600 Avenida Principal de Macaracuay, Multicentro de Macaracuay,
basf.com.ar Piso 10, Oficina 10, Macaracuay, 1073,
Caracas – Venezuela
BASF Bolivia S.R.L. tel. 58 212 256 0011 – fax 58 212 256 3379
Avenida San Martín, 1800, Piso 4, Edificio Tacuaral, basf.com.ve
Barrio Equipetrol, Santa Cruz de La Sierra – Bolivia
tel. 591 3 3141080 – fax 591 3 3141081 Wintershall Energía S.A.
Della Paolera, 265,
BASF Chile S.A. Piso 14, Buenos Aires – Argentina
Avenida Carrascal, 3851, tel. 54 11 5554 2700 – fax 54 11 5554 2701
Santiago de Chile – Chile
tel. 56 2 640 7000 – fax 56 2 775 3095
basf.cl
Follow us
BASF Construction Chemicals Ltda.
Centro Empresarial ENEA – Río Palena 9665
Santiago de Chile – Chile
tel. 56 2 799 4300 – fax 56 2 799 4340
facebook.com/basf
BASF Construction Chemicals Perú S.A.
Jr. Plácido Jimenez 630, Lima
tel. 51 1 2190630
basf.com.pe twitter.com/basf
BASF Ecuatoriana S.A.

Avenida Naciones Unidas, 1014 y Amazonas
Edificio La Previsora Torre A, Piso 2, Oficina 201, linkedin.com/basf
Quito – Ecuador
tel. 59 32 397 9500 – fax 59 32 397 9592
basf.com.ec
instagram.com/basf
BASF Paraguaya S.A.

Estados Unidos, 415, Piso 5°, San Roque,
Casilla 3064, Asunción – Paraguay.
tel. 59 5 21 49 8401 – fax 59 7 1720178 youtube.com/basf
BASF Peruana S.A.

Avenida Oscar R. Benavides, 5915, Callao, Lima – Perú
flickr.com/photos/basf
tel. 51 1 5132500 – fax 51 1 5132518
basf.com.pe

Further information
Credits
Corporate Affairs – BASF South America
Project Coordination
Corporate Affairs Director and Corporate Communications
Management – BASF South America
Cristiana Brito - Director Corporate Affairs and Sustainability
Claudia Barros - Corporate Communications Manager
Editing
Fabiana Nunes – Corporate Communications
Ornella Nitardi – Sustainability
Caroline de Lima Santos – Sustainability
Support
BASF South America business and operational units teams
BASF SE Corporate Communications Team
External Partners
Fábio Francisco – Layout
Global Conteúdo Estratégico – Consulting, content
Traduzca – Translation
Photography
Archive BASF
Felipe Abreu
João Athaíde
Archive Fundação Espaço ECO (FEE)
Sololumbre Produções
More information Contact
Published in May 2019 Corporate Communications

You can find the online version of this Report Fabiana Nunes
on our website: basf.com.br fabiana.nunes@basf.com | Phone: +55 11 2349 1936
Sustainability
Caroline de Lima Santos
caroline.delima@basf.com | Phone: +55 11 2039 3795
BASF supports the chemical industry's

global Responsible Care initiative.

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BASF in

We strengthen our passion for

Key facts 2018

One of the top three

410,000 3 Shared AgroStart program Mata Viva®:

About this Report

4 BASF in South America Report 2018

We create chemistry for relationships which in turn creates value for

In 2018, our sales to customers in South America amounted to

Innovation and sustainability are key pillars of our strategy, particularly

In 2018, we also made progress in bringing contributions to

In addition to this, last year we took great strides towards digital

As you will see in this report, everything we do is consistent with the

BASF in South America Report 2018 5

BASF Group 2018 Segment data

EBIT after cost of capital1 million € 825 2,902 (71.6%)

Net income  million € 4,707 6,078 (22.6%)

Earnings per share € 5.12 6.62 (22.7%)

Assets million € 86,556 78,768 9.9%

2018 2017 + / – Performance Products million €

Employees at year-end 122,404 115,490 6.0%

Research and development EBIT before 2018 | 1,376

Energy efficiency in kilogram of sales

Number of on-site sustainability

Functional Materials & Solutions million €

Sales 2018 | 21,435

EBIT before 2018 | 1,307

Agricultural Solutions million €

Sales 2018 | 6,156

1 E xcluding the oil and gas activities presented as discontinued operations

BASF in South America Report 2018 7

8 BASF in South America Report 2018

Goal Achievement in 2018 Employees

2020 goal Status at end of 2018 SDGs

SUPPLIERS BASF CUSTOMERS

Procurement Growth and profitability; Products and solutions Safety in production

Health Performance Index > 0.9 0.96 3, 8

Growth and profitability Energy and climate protection

Sales3 €62.7 billion 2.4% 3.3%

Products and solutions

The BASF Group

75,188 Asia Pacific

Employees 2 1 In 2018, by location of company

As part of our aspiration to be the world’s leading chemical company

13 BASF in South America Report 2018

New targets from 2019 onward

BASF in South America Report 2018 14

In 2018, the stock markets were characterized by long pe- 2.0%

riods of uncertainty as a result of geopolitical tensions and 4.9%

BASF share performance

MSCI World Chemicals 7.0%

Change in value of an investment in BASF shares in 2018

15 BASF in South America Report 2018

Proposed dividend of €3.20 per share Broad base of international shareholders

At the Annual Shareholders’ Meeting, the Board of Executive Directors

Rest of Europe 17%

United Kingdom/Ireland 10%

Employees becoming shareholders

In many countries, we offer share purchase programs that turn our

BASF in South America Report 2018 16

17 BASF in South America Report 2018

BASF in South America – Local Report

BASF in South America Report 2018 18

Together we build tomorrow

EBIT after cost of capital1 million € 825 2,902 (71.6%)

Net income million € 4,707 6,078 (22.6%)

Earnings per share € 5.12 6.62 (22.7%)

Assets million € 86,556 78,768 9.9%

Energy efficiency in kilogram of sales

1 E xcluding the oil and gas activities presented as discontinued operations