Profitable growth ensured by excellent innovation platform

Research Development in the BASF Group

• Leading research company in the chemical industry, spending €1,380 million in 2007 (2006: Euro 1.3 billion). Of the amount spent on research and development in 2006, 80% fell under the operational responsibility of the operating divisions, with the remaining 20% being accounted for by corporate research. This underlines the importance of innovations within the BASF Group.
• In 2008 we are planning expenditures of €1,450 million - no other company in the world spends more on chemical research.
• Agricultural products is our most R&D intensive business, where we will spend approx. 25% of our total R&D Euros. This figure corresponds to a 9% R&D over sales ratio (based on sales 2006). For BASF Group (without Oil & Gas) the ratio is 3.0% (based on sales 2006). BASF employed more than 8,600 employees at our research and development facilities worldwide. The center of our research is Ludwigshafen.
• Besides our own BASF-R&D facilities, we entertain 1,800 co-operations world-wide, more than 40% with industrial partners. We have a portfolio of more than 120,000 patents. We file approx. 100 patents per month, these are more than 4 patents a workday.

Focus on five growth clusters

• We focus on five growth clusters that cover the most important approaches for future challenges: energy management, nanotechnology, white (industrial) biotechnology, plant biotechnology, and raw material change.
• As part of our strategy “We innovate for growth” we link chemistry with the related natural sciences. Consequently, the clusters represent a cross-section of various technologies and mirror the breadth of our know-how. From the years 2006 to 2008, we will be investing over €900 million in our growth clusters.
• Starting in 2015, we expect additional annual sales of between €2 billion and €4 billion from innovations based on projects in the growth clusters.

BASF and Monsanto: R&D and Commercialization Collaboration Agreement in Plant Biotechnology

• Step up volume of lead genes
• Develop stream of successive updates to create a 'family of products' in each crop
• Increase certainty of commercial success
• Focus on corn, soybeans, cotton and canola

• Discovery:
  Each company maintains independent discovery programs, which will generate leads to be nominated into development in the joint R&D pipeline
• Development: Nominated projects are jointly funded at 50-50 cost sharing through each phase of development
• Commercialization: Emerging products are commercialized by Monsanto under a broad-licensing approach to seed companies across Monsanto’s existing three commercial channels. Value from commercialization is shared at 60% for Monsanto and 40% for BASF.