1. BASF - The Chemical Company Our Strategy for Profitable Growth Dr
BASF - The Chemical Company Our Strategy for Profitable Growth Dr. Martin Brudermüller Member of the Board of Executive Directors

2. 1 | BASF - The Chemical Company
2 | Historic success stories
3 | Our strategy for future growth
4 | Lessons learnt

3. chemical company worldwide
BASF – Number 1
chemical company worldwide
The world’s leading chemical company: No. 1–3 market position in 75% of all products and markets
Sales 2007: 58.0 billion Euro
EBIT 2007: 7.3 billion Euro
Business partners in over 200 countries
More than 150 production sites
More than 95,000 employees worldwide

4. 2007 total sales*: 58 billion Euro
BASF’s balanced portfolio
Sales by segment in 2007
Agriculture & Nutrition
Chemicals 6%
16%
Plastics* 17%
18%
Performance
Products
Oil & Gas
Functional Solutions
16%
Chemical Activities
15%
2007 total sales*: 58 billion Euro
* Styrenics are reported under ‘Other’ following the transfer of the Specialty Plastics and Foams business units to the Performance Polymers division as of January 1, 2008

5. BASF-Group: Sales by region in 2007
Sales 2007 in million EUR* (change compared with previous year in percent)
32.4
9.6
4.1
11.9
Europe +9.6%
North America +3.5%
Asia Pacific +18.0%
South America
+18.5%
Total: 58.0 bn EUR
*Sales to third parties by location of customer

6. 1 | BASF - The Chemical Company
2 | Historic success stories
3 | Our strategy for future growth
4 | Lessons learnt

7. Growth driver (I) Actively shaping the change …
Since 2004 The Chemical Company
1965 – 2004 From Ludwigshafen to the world
1953 – 1965 The beginning of the plastics age
1945 – 1953 Reconstruction and new beginning
1925 – 1945 New high-pressure syntheses
1901 – 1925 The age of fertilizers
1865 – 1901 Founding of
BASF – the age of dyes

8. … without loosing the own historic roots
In the 80s
2006
Oil and Gas
Petrochemicals
New JV
BASF
BASF
Ticona, Celanese
Formosa
Plastics
Commodity Chemicals
Sabic
Hoechst
Lanxess
Invista
Dow
Specialty Chemicals
Bayer Mat.Sc.
DuPont
Clariant
Dow
Akzo
DuPont
Agrochemicals/ Biotechnology
Bayer Crop Sc.
Bayer
ICI
Syngenta
Pharma
Sanofi
Aventis
Bayer Healthcare
Astra, Zeneca

9. Growth driver (II) Innovation
Indigo (1897)
Ammonia (1913)
Vitamine A (1963)
Strobilurines (1996)
Polystyrene (1930)
3L House (2001)
Since its foundation, BASF created a continuous stream of successful & revolutionary innovations

10. Growth driver (III) The Verbund
Linking partners across the Verbund network
Production plants
Research units
Customers
Site community
Economic and environmental advantages
Extremely efficient use of raw materials and energy
Conserves natural resources
Reduces emissions and waste
Drives innovation for us and our customers

11. 1 | BASF - The Chemical Company 2 | Historic success stories
3 | Our strategy for future growth
4 | Lessons learnt 11

12. Our four strategic guidelines for profitable growth
Earn a premium on our cost of capital
Help our customers to be more successful
Ensure sustainable development
Form the best team
in industry
The Chemical Company

13. Constantly improving our cost base
Global Efficiency Improvement Program
Cost savings
Ludwigshafen 480 m Euro by 2005
Antwerp 73 m Euro by 2006
Europe m Euro by 2006
NAFTA 400 m USD by 2006
Global Efficiency Improvement Program
210 m Euro by 2007
300 m Euro by 2008e
Cost savings in million EUR
1,000
1,250
1,500
Antwerp
Europe
NAFTA
Ludwigshafen

14. Excellent platform to enable faster-than-market growth
Superior growth opportunities
Good position in
growth markets
Strong presence in Asia
Enhance position in high growth businesses
Active portfolio
optimization
Acquisitions in core business
Divestments, restructuring & reorganization
Strategic partnerships
Excellent
innovation platform
Market-driven innovation
Innovative business offerings
Excellent platform to enable faster-than-market growth

15. Asia – The world’s largest chemical market
Chemical demand
(excluding pharma)*
2006 $1,900 billion
2020 $3,000 billion
SA 5%
SA 5%
% p.a.
$720 billion
$1,300
billion
Asia Pacific
45%
Asia Pacific
37%
WE 21%
WE 26%
NAFTA
24%
NAFTA
20%
*Real figures (base 2006)

16. Asia Pacific will become the world’s leading manufacturing hub by 2020
451
Industrial production (in billion USD)
2,305
100%
6,553
10,734
4,657
Rest of world
Greater China
633
2,155
Greater China
65%
57%
South Asia
131
ANZ 55
221
ASEAN
South Asia
Korea
190
305 71
ANZ
451
ASEAN
358
Korea
Japan
1,076
Asia Pacific
1,317
Japan
35%
43%
2006
2006
2020
2020
Source: BASF ZZS: Real value-added, baseline 2006

17. By 2010 in Asia, we want to:
1 | Contribute 20% of the BASF Group’s global sales and earnings in its chemical businesses, thereof half in China.
2 | Build a local manufacturing base to secure 70% of domestic sales.
3 | Strengthen our position as one of the top five suppliers in our strategically relevant markets.
4 | Form the best team in the industry. 17

18. Strong sales and profitability in Asia Pacific
0.0
Strong sales and profitability in Asia Pacific
Sales*
EBIT
Billion Euro
Million Euro
9.6 4%
ANZ 8%
South Asia 9%
South Korea
CAGR:
+ 13.7% p.a.
CAGR:
+ 26.6% p.a.
16%
Japan
17%
ASEAN
2.7
46%
Greater China
1997
2007
1997
2007
*Net sales to third parties by location of customer

19. Powerful production network in Asia Pacific
62 wholly owned subsidiaries
106 production sites
179 plants
10.5 million tons installed capacity
~60 % local production
Investments in Asia:
2003 – 2007: €2.8bn
2008 – 2012: €2.5bn
China
Pakistan
S. Korea
Japan
Bangladesh
India
Taiwan
Hong Kong
Thailand
Vietnam
Philippines
Malaysia
Singapore
Indonesia
Australia
Australia
Regional Headquarters
Verbund site
Production sites
New Zealand

20. Building strategic partnerships with Korea‘s global champions
Example: Hyundai.KIA
Global partnership since 2004
Joint development projects
BASF supplying broad product portfolio:
Polyurethanes
Engineering plastics
Engine coolants and brake fluids
Coatings
Vehicle cataysts

21. Building strategic partnerships with Korea‘s global champions
Example: Daelim Industrial Co. Ltd
Partnership since 2005
Joint activities on ecological friendly construction projects
3L model house at Daelim R&D Center with BASF’s products
Neopor® (thermal insulation)
Micronal® (phase change material)

22. 98% local employees 55% Asian executives 50% lower attrition rate
Excellent local team in Asia Pacific
98% local employees
55% Asian executives
50% lower attrition rate
Good position in
growth markets
Strong presence in Asia
Enhance position in high growth businesses
High attraction
of local talents all over Asia
Know-how driven international executive pool
High identification and loyalty of employees with BASF

23. Excellent platform to enable faster-than-market growth
Superior growth opportunities
Good position in
growth markets
Strong presence in Asia
Enhance position in high growth businesses
Active portfolio
optimization
Acquisitions in core business
Divestments, restructuring & reorganization
Strategic partnerships
Excellent
innovation platform
Market-driven innovation
Innovative business offerings
Excellent platform to enable faster-than-market growth

24. Profitable growth through active portfolio management
high
low
Performance
Market Attractiveness
Improve or
disappear
Develop
Reposition
Hold
R&D
Investments
Acquisitions
Generate growth above industry average
Offer a special value proposition to customers
Are innovation driven
Reduce earnings cyclicality
Meet our financial criteria

25. Selected transactions 1997-2007 Powerful partnerships
Consistent portfolio management towards higher returns and reduced cyclicality …
Selected transactions
Major acquisitions
Major divestitures
Crop protection (AHP, Fipronil, seed treatment)
Superabsorbents
Oil & Gas (NL)
Engineering Plastics
Electronic Chemicals
Custom synthesis
Catalysts/Pigments
Construction Chemicals
Water-based resins
Pharmaceuticals
Fertilizers
Refineries
Decorative paints
Fibers
Printing systems
Polyolefins (Basell)
Polystyrene North America
Agchem generics
BASF
Core
Businesses
Powerful partnerships
Shell
Gazprom
Sinopec
Petronas
Toray
Monsanto
€13 billion
(Sales)
€11 billion*
(Sales)
* Including non-consolidated sales from BASELL

26. … is reflected by BASF’s increasing share of specialty chemicals
Net sales to third parties in million € *
Specialties
Commodities
58%
63%
55%
53%
52%
54%
42%
45%
48%
47%
37%
46%
* Excluding Precious & Base Metal Services, Oil&Gas and ‘Other’ ** Excluding Styrenics commodity business

27. Excellent platform to enable faster-than-market growth
Superior growth opportunities
Good position in
growth markets
Strong presence in Asia
Enhance position in high growth businesses
Active portfolio
optimization
Acquisitions in core business
Divestments, restructuring & reorganization
Strategic partnerships
Excellent
innovation platform
Market-driven innovation
Innovative business offerings
Excellent platform to enable faster-than-market growth

28. Global megatrends underpin innovation efforts
Growth and aging of the world population
Urbanization and metropolization
Energy demand and climate impact
Economic globalization and emerging markets
Megatrends
Health & Nutrition
Housing & Construction
Energy & Resources
Mobility & Communication

29. Growth clusters: Cross-sectional technologies feeding our businesses
Megatrends
Health & Nutrition
Housing & Construction
Energy & Resources
Mobility & Communication
Growth Clusters
Energy Management
Nano- technology
Plant
Biotechnology
Industrial
Biotechnology
Raw Material Change
Chemical relevant technology base

30. Focus on five growth clusters
Business
model
Product
innovation
Process
innovation
R&D expenditures for growth clusters more than 900 million EUR from 2006 – 2008
Approx. 25% funded by divisions, 75% corporate funded
First projects out of growth clusters came to market by 2007
Plant
Biotechnology
Biology
White Biotechnology
Raw
Material
Change
Chemistry
Energy
Management
Nano-
technology
Physics
Targeted annual sales from growth clusters
2010
2015
0.5-1 billion Euro
2-4 billion Euro

31. Enabling viable energy supply strategies
Energy Management:
Enabling viable energy supply strategies
Life cycle of technologies
for primary energy supply
Challenge: Increase of global primary energy demand from 84 to 128 bn barrel OE in 2030*
Target: Develop innovative materials and solutions for portable and sustainable energy supply
Approach: Fuel Cells generate electrical energy and heat from hydrogen, methanol or hydrocarbons
Hydro
Gas
Oil
Coal
Nuclear
Batteries
Wind
Photovoltaic
Biomass
Biofuels
Geothermal
Fuel cells
Marine
Embryonic
Growth
Mature
* Source IEA 2006

32. * Catalyst, membrane and membrane electrode assembly
Fuel cells
Business development in value chain
BASF activities
Market volume* by 2015 in million Euro
Fuel cells benefits:
High energy density
No charging time
Low noise
Innovation drivers:
Cost reduction
Lifetime improvement
System miniaturisation
Development partners:
Aisin, Honda, Sony, MTI Micro, Nissan, Plug Power, Toyota, Samsung,Tatung, Ultracell
Catalyst
Membrane
MEA*
Stack
System
Portable
800
Stationary
200
Automobile
500
BASF sales target: 150 – 200 million Euro in 2015
* Catalyst, membrane and membrane electrode assembly

33. Plant biotechnology: Increasing need for agricultural productivity
4F – drivers of agricultural innovation
Food Latest UN estimate on growing world population projects 9.2 billion people for 2050
Feed Rising social standards drive global demand for more processed food, especially for meat consumption in Asia
Fiber Cotton is the single most important textile fiber in the world, accounting for about 40% of all fibers produced
Fuel Use of grain for fuel is growing by roughly 20% per year
Market potential
In 2007, the US corn harvest alone is estimated to be worth about 48 billion USD
Research target: at least 10% yield increase

34. Plant Biotechnology: KOGENT Cooperation
Cooperation and licensing agreement between BASF Plant Science and Korean Crop Functional Genomics Center (CFGC)
Involving 200 top researchers from from 40 renowned research institutes  one of the largest agreements in the 10-year history of BPS
Applying biotech for agricultural efficiency, healthier nutrition and renewable resources
Demonstrates innovative spirit of BASF and Korea, as well as Korea’s leading role in plant biotech R&D

35. 1 | BASF - The Chemical Company
2 | Historic success stories
3 | Our strategy for future growth
4 | Lessons learnt

36. Lessons learnt: How to ensure long term profitable grow?
EBITDA* / assets in % 5 10 15 20 25 12 14 16 18 22
Akzo
BASF**
Bayer
Ciba
Dow
DSM
DuPont
PPG
Rhodia
Rohm & Haas
Solvay
Our success factors to become the leader in capital profitability
Long-term strategy
Repositioning of BASF as The Chemical Company
Management consequence, processes and tools
Dedication to innovation
EBITDA-margin
* EBITDA based on company reports 2007 (Akzo excl. pharma and ICI) ** BASF EBITDA excl. non-deductible oil taxes