BASF "most admired" firm despite pushing up costs
US business magazine Fortune, despite continually pushing up
packaging material prices, writes Anthony Fletcher.
In addition to its number one industry ranking, BASF was rated the top company in Germany across all industries. It was also ranked number one chemical company on Fortune magazines industry breakdown list of America's most admired companies.
"We believe the survey is an endorsement of our strong performance and successful strategy," said Jurgen Hambrecht, chairman of the board of executive directors of BASF. "We are proud to call ourselves The Chemical Company, and will strive to maintain our leading position in the future."
But like most of the big chemical companies, BASF has been steadily raising the price of its packaging materials such as styrene polymers for the past 12 months. As of today for example, the cost of Terluran and Luran have been pushed up by €200 per metric ton.
The company claims that the measures are necessary because raw material costs have increased yet again and are expected to increase further. Oil prices struck $50 a barrel for the first time since November last week, prompting traders to forecast a return of the record prices seen last autumn. This, says BASF, has made the extreme erosion of margins for these two product groups even worse.
The ability of the chemical giant to pass on its costs suggests that it is the packaging firms that are continuing to bear the brunt of current high oil prices. Steadily increasing costs over the past 12 months have been absorbed to the extent that general polystyrene prices increased by nearly 70 per cent last year. Chemical companies on the other hand have been able to remain financially solid despite a slight erosion of the margins.
BASF sees the ranking as vindication of its business operations. "We help our customers to be more successful through intelligent system solutions and high-quality products," said Hambrecht. "Through new technologies we can tap into additional market opportunities. We conduct our business in accordance with the principles of sustainable development."
Fortune magazine's rankings were achieved through a questionnaire of more than 10,000 directors, executives and managers at 357 companies around the world. Each respondent was asked to rate the other companies in his or her industry on nine attributes, and the average of those scores was used to compile the industry lists.
The nine attributes were innovation, use of corporate assets, global spread, quality of management, employee talent, financial soundness, long-term investment value, social responsibility and quality of products and services.
