BASF

BASF AG (Badische Anilin-und Soda-Fabrik) is the world's largest chemical company (in terms of both net sales and number of employees). The company has its headquarters in Ludwigshafen am Rhein (Rhineland-Palatinate, Germany). BASF handles a diverse, yet interrelated, portfolio of products, including chemicals, plastics, agricultural products, fine and specialty chemicals, petrochemicals, and fossil fuels and materials. As of December 2007 BASF had net sales of nearly $70 billion and employed over 95,000 people.

BASF, along with Bayer and Hoechst, was one of the important German chemical companies of the late 19th and 20th centuries. Its history of technological achievement—particularly between the 1870s and the 1940s—is unprecedented. BASF's early achievements revolved around coal-tar processes and high pressure synthesis and catalytic processing. Its successes, through international technology transfer to the United States, helped to revolutionize the modern petroleum refining and petrochemicals industries.

BASF was founded in 1865 by Friedrich Engelhorn in Mannheim, Germany. As with the other major German chemical companies of the late 19th century, BASF's success was based on advanced scientific and technical research in the synthesis of coal-tar-based organics. BASF's first important commercial products were coal-tar dyes for use in the textile industry. Indigo dye was its first important commercial technology. Profits from its synthetic dyes went into financing expansion of the company into the heavy chemical business. Prior to World War I, BASF employed approximately 10,000 people and had built its largest facility across the Rhine from its Mannheim plant, at Ludwigshafen.

At this time, BASF expanded beyond synthetic dyes to high-pressure synthesis. Under the technical direction of Fritz Haber and Carl Bosch, BASF developed two of the most important technologies of the 20th century chemical industry: a continuous sulfuric acid process and the famous high-pressure synthetic ammonia-methanol method. With these critical innovations, BASF could make the basic heavy chemicals cheaply, in mass quantities, and using inexpensive, abundant raw materials (e.g., nitrogen from the air to make ammonia).

During this period, the United States and European countries considered BASF the world's most important chemical company. BASF leveraged its technological superiority into market growth through strict patent control and predatory pricing strategies. Thus, BASF sold dyes, ammonia, and methanol at “below market prices” to U.S. firms to dissuade the U.S. chemical industry from expanding production at home. BASF played a prominent role for Germany during World War I since its technologies assured Germany of ready supplies of coal-tar dyes and drugs as well as explosives (for weapons and construction) and fertilizers (for food production) to carry on the war effort.

Even following Germany's defeat, it did not take long for BASF to resume production of its prewar product line and reestablish its market networks internationally. Its power and influence would soon grow within Germany when in 1925 it, along with Bayer, Hoechst, and other German-based chemical companies, joined in membership in the giant chemical cartel I. G. Farbenindustrie (IG Farben). By the late 1930s, the Nazis elevated IG Farben as its technical (and financial) right arm. During World War II, BASF remained the technological center of the cartel, developing the field of high-pressure hydrogenation that produced needed supplies of aviation and automotive [Page 123]fuels and synthetic rubber for the war effort. Following the defeat in Germany, members of Bayer's board of directors were convicted of war crimes, but were given relatively lenient sentences of no more than four years. Under Allied supervision for seven years, IG Farben itself was finally broken up by the Allies in 1952 into its component corporate parts.

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