Feb. 25 - The world's largest chemicals company by sales predicts operating profit will edge higher this year on growing demand from auto makers and consumer goods companies. As Hayley Platt reports BASF's quarterly earnings exceeded expectations.
BASF is the world's largest chemicals company. And growing demand for its goods - particularly catalytic converters - have helped boost fourth quarter profits by 18 percent. The automotive industry is the group's most important market, worth almost 10 billion euros world-wide. North America in particular has been a profit powerhouse for the company says CEO Kurt Bock. SOUNDBITE: Kurt Bock, CEO BASF, saying (English): "Not only because we have shale gas which is a much cheaper fuel but also because we have improved our operations and we continue to see good growth in those industries which are important to BASF, namely automotive and construction and both industries will continue to grow in 2014." Despite achieving its goals, the German firm said the market environment remains challenging. Japan proved a 'big headache' in 2013 because of currency devaluations which hit sales and earnings. And BASF says that's likely to continue this year too. It also confirmed that it won't be reviving its share buy back programme like rivals Dow Chemicals and DuPont. SOUNDBITE: Kurt Bock, CEO BASF, saying (English): "Currently we have a heavy investment programme underway. We increased CAPEX in 2013 it will be about the same level in 2014 and our foremost goal is to continue to grow BASF organically in a profitable way and for achieving that we need those investments." The group plans to invest in a new plant and equipment. It says it already pays a handsome dividend and that leaves little money left in the pot for buy backs.