BASF CEO says expects more industry consolidation
Wed Sep 12, 2007 12:13PM EDT
FRANKFURT, Sept 12 (Reuters) - The global chemical industry will see further consolidation ahead and Germany's BASF will play an active role, its chief executive said on Wednesday.
"The chemical industry is still highly fragmented," Juergen Hambrecht said in an interview published by the association of German exchange-listed companies, the Deutsches Aktieninstitut.
The world's 10 biggest chemical companies have a combined market share of less than 20 percent, which means consolidation must continue, Hambrecht said.
"BASF is playing an active role in this process and will continue to do so in the future," he said, but added that the prices currently being paid on capital markets were hard to justify.
Hambrecht said BASF had gained about 13 billion euros ($18 billion) in sales through its acquisitions over the past 10 years but the company had also sold off businesses with about 11 billion euros in sales in the same period.
BASF's chief financial officer Kurt Bock in the same interview highlighted the growth opportunities opening up as a result of the company's investment in its existing business.
"We will invest close to 11 billion euros between 2007 and 2011," Bock said, pointing to an expansion of facilities in Nanjing, China and the increase of production capacity for insulating materials at its Ludwigshafen headquarters.
Hambrecht said he was not worried about a takeover of the the company from financial investors, who would need to show they can do more with the company than current management.
"I don't believe that there is a team that can run BASF better than we can," he said.
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