PAPee/AssAf Paper General CEOs?
Part 1
<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published August 23, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Getting the chemistry right
Jurgen Hambrecht, chairman of the world's largest chemicals company, BASF, tells RONNIE LIM how sparks still fly for him in the laboratory and keep him going in his 30 years with the German giant
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>CHEMICALS must surely run in his veins.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>'Asia will see some impact from the weakening in the US and Europe, but Asia is also growing on its own because domestic demand is constantly growing in China and also in India. So I will still say that Asia will be the growth engine over the next year.'
- Jurgen Hambrecht
</TD></TR></TBODY></TABLE>Despite the heavy responsibilities which come with heading the world's largest chemicals company with over 95,000 employees worldwide, Jurgen Hambrecht still makes time to look over the shoulders of his chemists.
'If I can, I spend at least one day a month in our laboratories because you get so much encouragement talking with the young people and discussing what they have in the pipeline. This is absolutely great and rejuvenating,' says the BASF chairman.
Dr Hambrecht, 62 - who worked his way up the ranks of the German chemicals giant in his 30-plus years there - knows exactly the excitement of discovery, having started there in a lab coat himself.
'Chemistry was always something which woke my curiosity ... it was a discipline which allowed you to invent, to find new products and totally new entities which nobody else has before,' he said.
'In my career I had a lot of personal inventions ... I worked for nine years, mostly in the area of plastics and also in coatings. There was a lot of motivation,' said an animated Dr Hambrecht of his own lab successes at BASF.
It is this 'unplugged' Dr Hambrecht - refreshed by a break watching the Beijing Olympics in China, where BASF has multi-billion dollar petrochemical investments - who met BT in Singapore last week.
Sans business jacket and clearly relaxed, he cuts a totally different persona from the stern, no-nonsense chief executive whom I'd earlier observed at BASF functions in Nanjing and Mannheim.
'Was it the babes or the game you enjoyed?' I asked cheekily when he said he managed to take in beach volleyball, as well as gymnastics and badminton fixtures at the Beijing games.
'Everything, including the music,' he laughs, explaining that beach volleyball is a 'happening' thing in Germany, with tennis courts there, which are not doing so well, converting some of their courts for this.
And what is his impression of the Beijing Games' opening?
'Fantastic. You can see China is more creative than what many people believe, from the idea to the execution, this was super top class.'
Expansion into Asia, including China - where BASF in partnership with Sinopec is further expanding its multi-billion dollar petrochemical complex in Nanjing - is after all something close to his heart.
It is among the long-term corporate growth strategies outlined for BASF - a 58 billion euro (S$121 billion) a year revenue company - by Dr Hambrecht, who earlier headed its East Asia division. Other components include innovation; ensuring customer service and satisfaction; and efficiency in managing cost of capital.
'Asia is at this very moment a growth engine; the US is a bit weaker and Europe is in between. Going forward, I expect 2009 to be more difficult than this year. But all in all, the world is much more balanced and this then leads to our strategy,' he said.
Explaining, Dr Hambrecht said that being a global player is all about regional balance. 'BASF's home market is Europe, and even a global player needs to be strong in its home market and we are very strong. (But) now is the time to look more at Asia where 50 per cent of growth of our industry is, going forward, and this is exactly what we are looking for, not forgetting all the other regions which are important to us as well.'
Asked if he thought the Asian growth story was still intact given reports of slowing growth, including in China, Dr Hambrecht replied: 'You know if you talk about growth rates in China of 10 per cent, and next year again you start talking about 10 per cent, in absolute terms it is much bigger, so we need to be very, very careful in extrapolating things.
'I think yes, Asia will see some impact from the weakening in the US and Europe, but Asia is also growing on its own because domestic demand is constantly growing in China and also in India. So I will still say that Asia will be the growth engine over the next year.'
With BASF regarded as a bellwether for German industries, is there a sense of an economic slowdown in the European powerhouse itself?
'I don't believe this. We have seen strong growth rates in the first quarter. If we are going to look at global economies from quarter to quarter, we are missing a point. Let's look at the entire year.
'I don't see a recession because a lot of industries in Germany still have full order books going into the first half of 2009 at least. The Federation of German Industries (BDI), of which I am vice-president, estimates growth this year of about 2 per cent. Next year, growth will, however, be slower,' he conceded.
This does not necessarily mean that German companies will start worrying more about the slowdown at home, with possible job losses, rather than expand to growth markets. This is something which cannot be generalised, as it varies from company to company, he said.
'As for BASF, we are a long-term investor. During the Asian crisis, we've always said we are here to stay. We made major investments at that time, and going forward we will continue to invest in Asia, irrespective of the business environment in US or Europe.'
What has helped though has been a cooling in oil prices. The day we had our conversation, oil had dipped to US$115 a barrel, down from its record US$147. Was this a tipping point?
'I already said this last year, that oil prices will not stay where they are. It's no longer physically traded. It's become a financial product and as such, you see all kinds of speculation, you see overshooting ... now it's a correction.
</TD></TR></TBODY></TABLE>
Part 1
<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published August 23, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Getting the chemistry right
Jurgen Hambrecht, chairman of the world's largest chemicals company, BASF, tells RONNIE LIM how sparks still fly for him in the laboratory and keep him going in his 30 years with the German giant
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>CHEMICALS must surely run in his veins.<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>'Asia will see some impact from the weakening in the US and Europe, but Asia is also growing on its own because domestic demand is constantly growing in China and also in India. So I will still say that Asia will be the growth engine over the next year.' - Jurgen Hambrecht
</TD></TR></TBODY></TABLE>Despite the heavy responsibilities which come with heading the world's largest chemicals company with over 95,000 employees worldwide, Jurgen Hambrecht still makes time to look over the shoulders of his chemists.
'If I can, I spend at least one day a month in our laboratories because you get so much encouragement talking with the young people and discussing what they have in the pipeline. This is absolutely great and rejuvenating,' says the BASF chairman.
Dr Hambrecht, 62 - who worked his way up the ranks of the German chemicals giant in his 30-plus years there - knows exactly the excitement of discovery, having started there in a lab coat himself.
'Chemistry was always something which woke my curiosity ... it was a discipline which allowed you to invent, to find new products and totally new entities which nobody else has before,' he said.
'In my career I had a lot of personal inventions ... I worked for nine years, mostly in the area of plastics and also in coatings. There was a lot of motivation,' said an animated Dr Hambrecht of his own lab successes at BASF.
It is this 'unplugged' Dr Hambrecht - refreshed by a break watching the Beijing Olympics in China, where BASF has multi-billion dollar petrochemical investments - who met BT in Singapore last week.
Sans business jacket and clearly relaxed, he cuts a totally different persona from the stern, no-nonsense chief executive whom I'd earlier observed at BASF functions in Nanjing and Mannheim.
'Was it the babes or the game you enjoyed?' I asked cheekily when he said he managed to take in beach volleyball, as well as gymnastics and badminton fixtures at the Beijing games.
'Everything, including the music,' he laughs, explaining that beach volleyball is a 'happening' thing in Germany, with tennis courts there, which are not doing so well, converting some of their courts for this.
And what is his impression of the Beijing Games' opening?
'Fantastic. You can see China is more creative than what many people believe, from the idea to the execution, this was super top class.'
Expansion into Asia, including China - where BASF in partnership with Sinopec is further expanding its multi-billion dollar petrochemical complex in Nanjing - is after all something close to his heart.
It is among the long-term corporate growth strategies outlined for BASF - a 58 billion euro (S$121 billion) a year revenue company - by Dr Hambrecht, who earlier headed its East Asia division. Other components include innovation; ensuring customer service and satisfaction; and efficiency in managing cost of capital.
'Asia is at this very moment a growth engine; the US is a bit weaker and Europe is in between. Going forward, I expect 2009 to be more difficult than this year. But all in all, the world is much more balanced and this then leads to our strategy,' he said.
Explaining, Dr Hambrecht said that being a global player is all about regional balance. 'BASF's home market is Europe, and even a global player needs to be strong in its home market and we are very strong. (But) now is the time to look more at Asia where 50 per cent of growth of our industry is, going forward, and this is exactly what we are looking for, not forgetting all the other regions which are important to us as well.'
Asked if he thought the Asian growth story was still intact given reports of slowing growth, including in China, Dr Hambrecht replied: 'You know if you talk about growth rates in China of 10 per cent, and next year again you start talking about 10 per cent, in absolute terms it is much bigger, so we need to be very, very careful in extrapolating things.
'I think yes, Asia will see some impact from the weakening in the US and Europe, but Asia is also growing on its own because domestic demand is constantly growing in China and also in India. So I will still say that Asia will be the growth engine over the next year.'
With BASF regarded as a bellwether for German industries, is there a sense of an economic slowdown in the European powerhouse itself?
'I don't believe this. We have seen strong growth rates in the first quarter. If we are going to look at global economies from quarter to quarter, we are missing a point. Let's look at the entire year.
'I don't see a recession because a lot of industries in Germany still have full order books going into the first half of 2009 at least. The Federation of German Industries (BDI), of which I am vice-president, estimates growth this year of about 2 per cent. Next year, growth will, however, be slower,' he conceded.
This does not necessarily mean that German companies will start worrying more about the slowdown at home, with possible job losses, rather than expand to growth markets. This is something which cannot be generalised, as it varies from company to company, he said.
'As for BASF, we are a long-term investor. During the Asian crisis, we've always said we are here to stay. We made major investments at that time, and going forward we will continue to invest in Asia, irrespective of the business environment in US or Europe.'
What has helped though has been a cooling in oil prices. The day we had our conversation, oil had dipped to US$115 a barrel, down from its record US$147. Was this a tipping point?
'I already said this last year, that oil prices will not stay where they are. It's no longer physically traded. It's become a financial product and as such, you see all kinds of speculation, you see overshooting ... now it's a correction.
</TD></TR></TBODY></TABLE>
