Innovative Chemicals for a Competitive Landscape

Q: How did BASF make a difference for its customers and consumers in 2018?

A: Before the Energy Reform, the availability of chemical products was the most important aspect of service for our clients in Mexico. Now, performance and added value services and products are taking center stage as differentiation comes into play. While some gas station owners are looking to attract customers by adding a grocery store to the forecourt, BASF is aiding those companies that wish to provide improved gas to customers. As consumers now have more choice at the pump, we believe the products we provide make a difference. Our technologies and chemicals offer a number of benefits that companies can pass onto their customers, including more efficient gasoline combustion.

Q: What challenges has BASF faced in Mexico following the Energy Reform and how has the company dealt with these?

A: Storage for our additives was one of the main obstacles we had to overcome following the Energy Reform. The logistics infrastructure was not as robust in Mexico as some of the other countries we operate in and the country’s geography makes some areas complicated to reach. Security on the roads and in the rail system is a continuing issue. We had to be innovative and work together with our customers to find disruptive solutions for the logistics puzzle. While the infrastructure complications mean coststo-serve are higher than we would like, our first intention was to enter into Mexico’s petrochemical market as it is one of the largest in the world. Mexico is also in the Top 10 countries globally for gasoline consumption. As part of our strategy, we built digital solutions to tackle these issues, which have positioned BASF as an innovative technology partner.

Q: How is BASF working with local logistics companies to reduce costs?

A: We have global contracts so in some cases we do not work with local companies. We often speak with our partners to see how we can reduce our costs locally. Unfortunately, we cannot control all the costs associated with the logistics network. We are trying to gain attention by pushing topics like rail and road insecurity to the appropriate channels in the hope that investments can be made in order to improve logistics services in the country.

Q: How is Mexico positioned within BASF’s global network?

A: Mexico is an important market for additive producers due to its gasoline consumption. As the Energy Reform happened only recently, the landscape here is still shifting. But we believe Mexico offers big opportunities for growth. Storage offers huge potential for growth. This fact is reflected in the behavior of our global customers, many of whom are consulting us on best practices to enter into the Mexican gasoline retail market.

Q: How does BASF differentiate itself in a more competitive Mexican market?

A: Our competition is extremely good and, like us, it is global. We do not have local competition because the technology we use would require too much investment for a smaller company. Our R&D process is extensive; every formula we manufacture undergoes five to seven years of testing prior to going to market. In addition to state-of-the-art technology, we focus our differentiation on service and added value. Infrastructure offers us many opportunities for the future and we see Mexico as a place where we can keep growing, focusing on our strengths.

Q: What are BASF’s main goals for 2019?

A: We want to continue growing and increase our share in Mexico. At the moment, we still have a lot to do in order to reach the same presence as in the other countries we work in. We also want to raise awareness in both, the industry and the world, about how technology and chemistry have a positive impact on the planet. The chemical industry often suffers from negative misconceptions and part of BASF’s role is to demonstrate that on the contrary, chemicals can bring enormous benefits adding value to the environment, society and economy.

BASF SE is a German chemical company. The BASF Group comprises subsidiaries and JVs in more than 80 countries and operates six integrated production sites and 390 other production sites in Europe, Asia, Australia, the Americas and Africa.