Strong vitamin sales help boost BASF's earnings

By Alex McNally

- Last updated on GMT

Related tags: Basf

Improved vitamin sales for BASF have helped contribute towards a
healthy final quarter of 2007 and a "record year" for the firm.

The German company today posted total group-wide sales of €58bn, with total income from operations recorded at more than €7.6bn for the full year. Vitamins ​ The nutrition aspect of BASF falls under the fine chemicals division. Income from operations rose "significantly" from negative €66m in 2006, to €171m last year. An "improved market environment"​ for sales for several vitamins increased significantly, BASF said. Margins were higher as a result of optimized portfolio and reduced fixed costs, the firm added at a press conference this morning. BASF said overall sales for the segment were stable throughout the year. For the fourth quarter results, BASF said that a higher sales of vitamins helped contribute towards a rise in earnings, which increased from €36m to €98m for the three month period. Sales down ​ BASF said a restructure of the segment, initiated in 2006, continued to be successfully implemented. The firm added that 2007 saw it exit the lysine and premix businesses. Despite vitamin sales increasing, the division reported an slight sales slump of some 0.2 per cent from 2006's €1,855m to lat year's €1,852m. The drop in sales was put down to BASF quitting lysine production. Profit margins for lysine - an animal feed ingredient - have been seriously hit over the last few years. Last summer BASF said it would increase its annual capacity of the chemical intermediate propionic acid - a major component in the production of vitamin E - at two of its sites. The firm hopes to boost production at it sites in Ludwigshafen, Germany, and Nanjing, China, by 30,000 metric tons and 9,000 metric tons respectively. By 2009 the company hopes to have a capacity to make 149,000 metric tons of propionic acid each year, in response to a growing demand for the product. Currently the capacity is 110,000 tonnes. The agricultural products segment - which includes products such as fungicides and insecticides - saw a year-on-year sales increase of €58m. Outlook ​ Overall the company saw an increase in total sales in Europe by 9.1 per cent. This rise was driven by the catalysts and construction chemicals division. But in Asia Pacific the chemicals division helped the firm walk away with a 17.9 per cent increase in sales. For 2008, the firm hopes to increase its research budget in areas such as nanotechnology and biotechnology. Dr Jürgen Hambrecht, chairman said: "The first weeks of 2008 have run on smoothly from the past year for BASF. The level of orders remains strong and the capacity utilization rates of our plants are high. We therefore expect that BASF's business will also develop positively in 2008." ​BASF is made up of the following segments: chemicals, plastics, performance products, agricultural products and oil and gas.

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