BASF Bullish On 1997 As Reflects On 1996

BASF expects 1997 to be a year of growth. The overall economic situationis good and orders have increased significantly during the early months of the year, said Jurgen Strube, chairman of the German chemical and pharmaceutical group, at its annual press conference earlier this month. He has set a sales target for 1997 of 50 billion Deutschemarks ($29.2 billion), and said that earnings will also increase. Indications of a significant rise in turnover and profits in the first quarter of the year was a sound enough footing for Mr Strube to say that he expects the company to make some major acquisitions this year, perhaps adding to the group's pharmaceutical business, although he gave no specific indication as to where an acquisition might be made.

He said: "the groundwork for this growth is laid in the long term by innovation and capital expenditure. In 1996, we allocated a budget of nearly 2.3 billion marks to R&D." Capital expenditure at the company rose 20% to over 3.6 billion marks, with 1.75 billion marks invested in Germany alone. "A further increase in capital spending in the BASF group to 3.8 billion marks is planned for 1997," he said.

Undoubtedly, 1996 was a good year, "one of BASF's best," according to Mr Strube. Group sales and profits for 1996 were announced in March (Marketletter March 31). The health and nutrition business, which consists of pharmaceuticals, fine chemicals, crop protection and fertilizers, reported turnover last year of 9.1 billion marks, up 14.1%. Operating income quadrupled to 781 million marks, compared with 194 million marks achieved in 1995.