FRANKFURT (AFP) — BASF, the world's leading chemicals company, confirmed its 2008 growth outlook Tuesday despite a worsening backdrop for the sector.
"I am confident that BASF will achieve its goals for 2008 despite the rise in oil prices and the associated significant increase in raw material prices," BASF chairman Juergen Hambrecht told an investors conference organised in London and broadcast via the Internet.
A BASF statement said that "in 2008, assuming there are no changes made to our portfolio, we aim to increase sales and improve EBIT (earnings before interest and tax) before special items slightly."
The group lowered its production growth forecast for the sector as a whole however to 2.4 percent from a previous estimate of 2.8 percent.
BASF based its outlook on an average exchange rate of 1.55 dollars per euro and an average oil price of 120 dollars per barrel.
The firm's previous forecast levels were 1.50 dollars per euro and 90 dollars per barrel, respectively.
"No doubt we are in a much tougher environment than last year and the beginning of this year," Hambrechet told investors, pointing to foreign exchange volatility, high raw material prices and a deteriorating economic environment, notably in the United States.
In the coming five years, BASF said it should increase production volumes by two percent more than the chemical sector in general, excluding pharmaceutical products, and aimed for a profit margin of 18 percent.
Hambrecht confirmed that "negotiations are still going on" concerning the group's unit that produces styrolenes -- products used for example in the production of polystyrene.
BASF wants to sell the unit but has found it hard to find a buyer willing to pay enough for an operation that posts sales of around three billion euros (1.7 billion dollars) per year, the BASF chairman said.
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