BASF'S North American Results Show Improvement for First Half of 2004 MOUNT OLIVE, N.J., Aug. 4 /PRNewswire-FirstCall/ -- BASF's North American financial results showed improvement in the first half of 2004 with substantial year-over-year growth in sales and earnings. BASF Aktiengesellschaft announced its second-quarter financial results today in Ludwigshafen, Germany. Details can be found under http://www.basf.de/interimreport. In the second quarter, sales in North America increased by 11 percent to EUR 2.2 billion (about $2.7 billion). Income from operations before special items rose almost 300 percent to EUR 204 million (about $250 million). In the first six months of 2004, sales in North America increased 5 percent to EUR 4.1 billion (about $5 billion). Income from operations before special items increased 250 percent to EUR 284 million (about $346 million) during the same period. First-half results are typically stronger than second-half results in North America due to the seasonality of the Agricultural Products business. Most divisions in North America reported year-over-year increases in sales as a result of higher volumes and selling prices. The Chemicals and Plastics segments recorded the largest percentage increases in sales and earnings before special items. Contributing to the increases were five acquisitions by these business segments in 2003 and 2004. "Our first-half results show that we are making clear and substantial progress in North America. However, we still have more work to do. In the near term, we will continue to increase prices to compensate for very high raw material prices. We also will continue to focus on reducing our fixed costs through our restructuring program," said Klaus Peter Loebbe, Chairman and Chief Executive Officer of BASF Corporation, BASF's North American affiliate. BASF is continuing to implement its North American restructuring program and expects to achieve its goal of reducing costs by at least $250 million by 2006. Based on progress to date, the company expects to achieve $175 million in savings in North America in 2004. The program involves optimizing service functions, manufacturing site operations and business processes. The streamlining of service functions, which resulted in the elimination of approximately 1,000 positions, has been largely completed. The optimization of manufacturing site operations and business processes is ongoing. * During the second quarter of 2004, the company announced restructuring plans for its Geismar, La., and Freeport, Texas, manufacturing sites. The programs will involve the reduction of 400 to 500 full-time- equivalent positions at the Geismar site and 150 to 180 full-time- equivalent positions at the Freeport site. The reductions will be substantially completed in 2005. * Also during the second quarter, key restructuring activities included announcement of the closure of the Batavia, Illinois, industrial coatings site to take place by year-end 2004. The site employs about 80 people. Production is being transferred to sites in Belvidere, N.J., Decatur, Ala., and Morganton, N.C. * The OEM coatings business continued implementation of product and process quality improvements in the second quarter that will reduce staffing by more than 40 positions by year-end 2004. * In addition, the Engineering Plastics business consolidated sales and applications development offices from four locations to two during the quarter. In September, BASF will relocate its North American headquarters from Mount Olive, N.J., to a substantially smaller facility in Florham Park, N.J. Note: BASF Group reports financial results in Euros. References to U.S. dollars are made using the exchange rate effective on June 30, 2004, of EUR 1.00 = $1.22. This conversion is provided solely for the convenience of the reader. 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. We employ about 11,000 people in North America and had sales of approximately $9 billion in 2003. 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. Our goal is to grow profitably and further increase the value of our company. We help our customers to be more successful through intelligent system solutions and high- quality products. BASF's portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. Through new technologies we can tap into additional market opportunities. We conduct our business in accordance with the principles of sustainable development. In 2003, BASF had sales of approximately $42 billion and over 87,000 employees worldwide. Further information on BASF is available on the Internet at http://www.basf.com/. DATASOURCE: BASF CONTACT: Tim Fitzpatrick, +1-973-426-2305, , or Jack Maurer, +1-973-426-3458, , both of BASF Web site: http://www.basf.com/usa http://www.basf.com/ x

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