The global chemical giant- BASF, re-established its Lagos office on Tuesday, after exiting the country in 2001, due to a mix of political and business factors. BASF's President in charge of the company's Europe, Middle East and Africa's business, Jacques Delmoitiez, led a delegation of the organisation's top shots from around the globe for the event. Before leaving the country for his base in Germany, Delmoitiez spoke with Business Editor, ADE OGIDAN. Excerpts.BASF has announced an Africa strategy. What does this entail'With our Africa strategy, we plan to tap into new long-term business opportunities. In addition to our existing operations in North and South Africa, we now also focus on East and West Africa. Our business with yield-enhancing crop protection products, construction chemicals and ingredients for end consumer contributes inter alia to increase sales significantly in Africa. The company's target is to more than double sales in Africa by 2020. Its sales, excluding gas, were around '1 billion in 2011.Where are the production sites of BASF in Africa'BASF has production sites for construction chemicals in Algeria, Morocco and Egypt. These are not large chemical plants, but small formulation and mixing stations to serve the local markets. In addition to this, BASF's Wintershall maintains exploration and production sites in Libya. In South Africa, BASF operates production facilities for emission catalysts, construction chemicals, coil coatings and polyurethane plastics.How are you strategising to mitigate inherent risks and also ensure corporate compliance to demands in the African market'Issues related to political instability, security and compliance led to the corporate decision to close our offices in the Sub-Sahara some years ago. Today, many African countries have shown significant progress regarding democratisation. Risks are comparable to other emerging markets in Asia or South America. With its products and innovations, BASF can contribute to the growth of the regional industry and the creation of jobs. The BASF Group expresses its commitment to responsible behaviour and integrity in its strategic core values. Such a commitment means that, as an international company, we take account of the legal and cultural contexts of the countries in which we operate. We therefore expect our employees to comply with the respective national laws and generally accepted business practices consistent with these laws. Executives, in particular, must act as role models and demonstrate a high level of social and ethical competence.Personal relationships or interests must not affect business activities. Decision-making processes must be based solely on factual considerations. Our relations with customers and suppliers are founded on quality, reliability, competitive prices and other objective criteria. Our high level of conduct demanded of employees is matched by the undertaking to give all employees the information and support they need. Every employee has the opportunity to seek confidential advice and help through the use of their respective compliance programme whenever questionable legal issues arise in the workplace.How did earnings in Africa develop'We do not publish earnings figures below regional level.Do you have plans to create an African BASF region'No, there are no such plans. Africa is part of our Region Europe organisation. We strongly believe that local presence and long-term commitment to Africa are the key to create sustainable business and jobs.How much are you going to invest in Africa within the forthcoming years'BASF is convinced that there is an accelerating growth potential within the African markets. Thus, we have recently invested in new office infrastructure in East and West Africa. We opened a business hub in Kenya, East Africa at the end of 2011, led by senior executive, and today (last Tuesday), we are celebrating the inauguration of our new office in Lagos, Nigeria. Closer proximity to potential and existing customers in this region will enable us to expand growth of our business in the Sub-Saharan markets at the same time ensuring that we create chemistry for a sustainable future. In our South African market, we continue to invest into production facilities as well. We are currently building a new dispersion plant in Durban, which will provide key raw materials for the coatings and construction industry, not only for the South African market but also for export into the Sub-Saharan market. The production is planned to start in September 2012.Specifically, what's the amount being projected for the expansion scheme'Please understand that we do not disclose any financial details on our African investment plans.Okay, which products are on the card now from your stable for African market'We will focus on products and solutions for the agriculture, feed/food, construction, furniture/wood, home and personal care industries, as well as the mining industry.How do you plan to increase your African workforce in view of recent developments'The increase in the number of our staff in East and West Africa is dependent on precise business needs, which we are still exploring at the moment. However, there will definitely be an increase in staff. This is also the reason why we are not able to publish exact figures at the moment.Its cheering that you have now re-established the Lagos office. But why did you leave the Nigerian market in 2001'I must say that all legal entities in Sub-Saharan Africa were closed after 2001 due to insufficient sales and issues related to political instability, security and compliance. We however, never left the West African market with our products, as we remained present via distributors and business partners. We believe that Nigeria, especially Lagos, has been transformed into the new economic hub of West Africa, if not the entire Sub-Saharan region. The importance of this location is further emphasised by the fact that BASF is opening a new business hub in Lagos.Indeed, the fact that BASF is further increasing its presence in the growing African markets, explained our resolve to open a new regional office in Lagos to serve customers in Nigeria and the other West African countries. Africa is a huge continent with a wealth of raw materials and a growing population. At the same time, the dynamically growing economy has enormous potential for BASF. Through establishing a local presence in Nigeria, we will be able to much better understand our customers' needs and to enhance BASF's market position.One of the key markets for BASF in Nigeria is the booming construction sector. The application of energy-efficient materials for insulation of public buildings and private homes contributes to saving energy. BASF offers polyurethane products such as insulated panels and spray foam systems helping to reduce energy bills and adding to the comfort of private homes and commercial buildings. Polyurethane is a versatile material, which can also be used in appliances, mining, footwear and high quality mattresses. BASF supplies admixtures for the ready-mix concrete industry as well as a wide range of products for industrial flooring, protective coatings, waterproofing solutions and joint sealants to the construction sector. There are also components for decorative paints such as dispersions, pigments and formulating additives. BASF already enjoys a reasonable market position, which it intends to further extend.Other target markets for BASF in Nigeria and West Africa will be nutrition, pharmaceutical and personal care. As many people in Africa suffer from vitamin and mineral deficiencies, BASF is engaged in food fortification of staple food such as cooking oil and flour through local partners in Nigeria. BASF is also addressing food security by helping feed producers and farmers to increase meat quality and yields. As a strategic partner of the pharmaceutical industry, BASF intends not only to provide high quality excipients and active ingredients, but will engage in technology transfer to local pharmaceutical manufacturers. Leveraging on a fast growing middle-class in Nigeria with rising consumer aspirations, BASF will offer novel solutions in cosmetics and personal care.Our engagement in West Africa ensures that everyone benefits- our customers, the local population and BASF. We want to be good neighbours at all our sites worldwide. This is why we are providing 20,000 BASF Interceptor mosquito nets to the Lagos Rotary Club for charity distribution. Interceptor is a unique, high-performance mosquito net, which demonstrates a fusion of BASF's expertise in textile development and insect control. A polymer binder system is combined with an insecticide and applied directly to the fibers of the nets in a unique treatment process. A controlled release of the insecticide ensures long-term effectiveness and the net delivers its protection even after 20 washes. The nets are odorless, soft to touch and pleasant to sleep under. Interceptor has been evaluated by the World Health Organisation and an interim recommendation has been given for its use in malaria prevention and control.As its target market in Nigeria, BASF will focus on the construction industry, especially in respect of possible innovative applications of energy-efficient materials for the building environment. We will however, also concentrate on fast growing markets such as nutrition, pharmaceutical and personal care.Do you have plans to start your own production facilities in West Africa'Our market development team is currently identifying possibilities and opportunities, which will be carefully evaluated before making a well informed decision. At the moment, it is still too early for any concrete plans.BASF has Representative Offices in Mali and Ivory Coast to promote agrochemicals. Why are you not been active in this area in Nigeria'Crop protection products have to be registered in Nigeria like in other countries on the world too and the process takes up to three years. BASF started registration process for crop protection products and working on portfolio development currently.Can you disclose the investment profile of the dispersion plant in South Africa'No, we cannot disclose the exact investment sum. Overall, we will invest a double-digit million euro amount, which means that we are talking about a major investment for BASF South Africa.To what extend has BASF been affected by political crisis that pervaded some North African countries, especially last year'The domestic situation varied from country to country. Except for Libya, our business did not face significant interruptions. We were (and still are) closely watching the situation in the different countries. The safety and wellbeing of our employees is of highest importance for us. On a business level, we see a partial impact in the first three quarters of last year. Our Egypt business particularly got the pangs of the crisis, as its neighbouring countries, which are its traditional export markets, were impacted.Can you comment on the current status of the Wintershall activities in Libya'In mid October, we restarted our oil production operations in the Libyan desert, which had been shut down for safety reasons at the end of February.. The initial production volume reached was about 20,000 barrels per day. It is not currently possible to say with certainty when the maximum daily production of around 100,000 barrels of oil a day will be reached again. Once enough crude oil has been collected in the storage tanks, it can be transported by tanker. Only then will the operations generate commercial revenue again- probably towards the end of the year.As well as the production operations on the Libyan mainland, crude oil production from the offshore platform Al Jurf in the Mediterranean began again a few weeks ago. Wintershall has a stake (6.75 per cent) in Block C 137 together with the national oil company Mabruk Oil (73 per cent / operator) and the French company Total (20.25 per cent). Wintershall has been producing crude oil in Libya since 1958. With investments of more than $2 billion and over 150 wells sunk, the company is also one of the largest oil producers in the North African country. The consortium has been producing crude oil there since 2003 at a depth of around 90 meters. Production was suspended at the beginning of March during the armed conflict in Libya.
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