The office of Kurt Bock, the chief executive of German chemicals giant BASF, is in a late 19th-century brick building in Ludwigshafen, a city on the Rhine river in western Germany. The building contrasts strongly with the company’s brand new administration and conference center next door, which is where the interview took place.
In a way, the two buildings symbolize the challenges faced by the 151-year-old company, which is the world’s largest producer of chemicals. BASF must continually modernize while relying on its traditional business base, and this paradox is causing trouble at the firm. But Mr. Bock, company head for five years and also chairman of the board of executive directors, shows a fighting spirit: BASF will succeed in transforming in the coming years.
He spoke to Handelsblatt about belt-tightening, high dividends, acquisitions, the threat from China, industry consolidation and the effects of low oil prices.
Handelsblatt: Mr. Bock, when you took office, you promised to leave BASF in better condition than you found it. You are now at the halfway point in your term in office, but BASF’s condition seems worse.
Kurt Bock: That depends on what you base it on.
Sales, profits, return on investment – everything is in decline.
At the moment, our profits are being influenced by prices over which we have no control. We are operating in a deflationary environment, not just with the oil and gas business. But the important point here is that we have continued to improve our medium- and long-term competitiveness. And it also isn’t the case that we weren’t profitable. Compared to German industry, we are quite profitable.