Urethane Comments from BASF Investors’ Call

Question:

Andreas Heine

Yes, thank you for taking my question. I would like to first address our net working capital if it has shown a strong improvement in Q3 and you have given some reasons for this. Is that only temp raises. Do we see then a strong networking capital reversal in Q4 or is that what you have managed here sticky for also on the full-year base. It’s the first question.

And then secondly, would you mind to give us an update on what you expect your availability in MDI and TDI will be next year. So, referring if you’ve planned an MDI in China, is the expansion of MDI in Chongqing. The TDI plant in Ludwigshafen may be also major turnarounds you have. So, what is what you can expect from this call the extremely profitable business?

Kurt Bock

Yes, thank you Andreas for your questions. As we talk about networking capital, I take the question as I sign it. So, we had another good Q3, actually it was better than Q2. We have grown very nicely from margins, are very satisfying we have to say. We don’t see any bottom leg going forward, if that is back on to your question in supplying the market in 2018.

The ramp-up in Ludwigshafen continues, of course we will exchange the reactor in 2018 with a large one. The original one was bigger than the current one. That means we also have more capacity available and we will certainly time that maintenance work to comply then or to be aligned with market development for a better way.

Then we have more capacity coming on-stream in Shanghai in our joint venture. And we are not yet at full capacity with our MDI plant in Chongqing, which also had a very good quarter in 3^rd quarter in 2017. And what you see is I think for Brent at work because we have a very good operating leverage in those businesses and with higher volumes and better prices.

These investments are paying off very nicely, I have to say. Hans?

Laurence Alexander

Good morning. Could you give some detail on your volume trends in China, how are you what’s happening in the upstream businesses compares with the downstream? And can you flush out a little bit the comments around catalysts, what’s happening excluding the precious metal pass through?

Kurt Bock

Okay. We have to look up the numbers for China to give you a little bit more detail here. Overall, we had a pretty good volume growth in Asia; almost 10% in Q3. In China or the major factor contributed into that even slightly higher than the 10%. So, this is moving on in the right direction. We have seen a higher utilization rates and for instance in our MDI plant in Chongqing, which has we have in the upstream businesses.

But given the overall let’s say 10% 12% growth, I would say that we have grown across the boat in most of our businesses, especially everything which is automotive and contractually related and this is really important for them for the downstream businesses. So overall, I think this was continuously good development in Asia and in China in particular in 2017.

And the second question I think I will hand over to Hans.

https://seekingalpha.com/article/4115795-basf-se-basfy-q3-2017-results-earnings-call-transcript?part=single