Company achieves $250 million in fixed cost reductions one year early FLORHAM PARK, N.J., Aug. 3 /PRNewswire/ -- BASF's North American business today reported that income from operations before special items in the second quarter rose 65 percent to 351 million euro (approximately $424.7 million) from 213 million euro in the same quarter in 2004, on the strength of the company's continuing efforts to reduce costs and increase margins. Second quarter sales in North America were 2.59 billion euro (approximately $3.13 billion), up 17 percent from 2.20 billion euro in the second quarter of 2004. The improvement in results despite high energy and raw material cost is due to solid economic growth in North America, the impact of the restructuring program that began in 2002, and continued focus on increasing margins. (BASF AG, the parent company based in Ludwigshafen, Germany, today announced its second quarter results. Details are available at http://www.basf.de/interimreport.) For the first six months of 2005, North American earnings from operations before special items were 622 million euro (approximately $752.6 million), more than double the 303 million euro for the first six months of 2004. North American sales for the first six months were 4.85 billion euro (approximately $5.87 billion), up 18 percent from 4.12 billion euro in the same period a year ago. Klaus Peter Loebbe, Chairman and Chief Executive Officer of BASF Corporation, the North American affiliate of BASF AG, said, "In the second quarter, BASF achieved the goal that we set in 2003 of $250 million in sustainable annual earnings improvements through fixed cost reductions in North America. We reached this goal one year earlier than scheduled due to focused implementation of our targeted restructuring measures." Loebbe added, "Since 2002, we have made a number of portfolio changes, restructured our service platform, optimized our plants and site locations, invested in new technology to streamline operations, and improved business processes. To date, we have sold or closed 11 sites and 12 plants, integrated six acquired sites, and started up seven new plants. Looking ahead, we will continue to enhance our effectiveness, work closely with customers to deliver value, and exploit acquisition opportunities." (Note: BASF AG reports financial results in Euros. References to U.S. dollars are made using an exchange rate of 1.00 Euro = $1.21 as of the close of the quarter and are provided solely for the reader's convenience.) BASF - The Chemical Company. We don't make a lot of the products you buy. We make a lot of the products you buy better.(R) BASF Corporation, headquartered in New Jersey, is the North American affiliate of BASF AG, Ludwigshafen, Germany. Rated in FORTUNE magazine as America's Most Admired Chemical Company, we employ about 10,000 people in North America and had sales of approximately $11 billion in 2004. For more information about BASF's North American operations, or to sign up to receive news releases by e-mail, visit http://www.basf.com/usa. BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. As a reliable partner to virtually all industries, BASF's intelligent solutions and high- value products help its customers to be more successful. BASF develops new technologies and uses them to open up additional market opportunities. It combines economic success with environmental protection and social responsibility, thus contributing to a better future. In 2004, BASF had approximately 82,000 employees and posted sales of more than $50 billion. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA), New York (BF), Paris (BA) and Zurich (AN). Further information on BASF is available on the Internet at http://www.basf.com/. DATASOURCE: BASF Corporation CONTACT: Robert Guenther, +1-973-245-6013, mobile, +1-973-519-2160, Web site: http://www.basf.com/usa http://www.basf.com/

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