How BASF Identifies New Areas of Business

How BASF Identifies New Areas of Business

Author: Vera Köster

Andreas Riehemann is Managing Director at BASF New Business GmbH
. The BASF subsidiary analyzes long-term trends in industry and society and identifies new growth fields for the company outside the core business areas.

He talks to Vera Koester for ChemViews magazine about how his department works, which trends can become a business, and which are the most fascinating trends for him at the moment.

Your department opens up new areas of business. What does that mean?

We search out long-term trends and innovative topics in industry and society as well as future markets. We analyze their growth potential and check whether potential new business areas are suitable for BASF. Our activities are focused on the client sectors: Transportation, building and construction, consumer goods, health & nutrition, electronics, agriculture, and energy & resources. Adequate topics are built up as new growth fields for BASF.

How do you discover trends?

We look at developments that are highly predictable long term and macroscopic in nature. Such a development in the beginning does not have anything to do with chemistry. Take, for example, settlement patterns. Here you can derive several reliable trends that predict how urbanization will increase, in what regions this will be strongest, and how those migration patterns will affect everything from local, small scale agriculture up to settlement and building patterns and how urban infrastructure will grow and be decisively different from today’s rural infrastructure. This gives you a solid foundation to translate this into likely growth areas and challenges. E.g. urban settlement will translate into more and more high rise buildings with all the associated challenges, from improving the processability and carbon footprint of concrete, managing the thermal envelope of these buildings, lighting them, etc., to preventing the formation of urban heat islands.

Do you operate your own R&D labs or do you mainly cooperate with partners?

To evaluate the technology and the market, we work closely with the central research areas and the divisions of BASF. Moreover, we cooperate with research institutes, universities, start-ups, and industrial partners worldwide. We permanently extend our network of experts beyond the boundaries of BASF via different forms of cooperation.

Are such cooperations public or do you keep them secret to a certain point to prevent competition?

This depends on the topic. Some projects are public, others we do not want to communicate at an early stage.

Do you develop materials or ready-to-use functional components?

Our core competence is chemistry – we, therefore, develop materials. In cases where we develop functional components, we usually work together with partners.

What is important to turn a trend into a business?

As a trend and a trend associated business opportunity are two very different things, the way from the former to the latter is a long one. It is the task of our Scouting and Incubation teams to translate trends into business opportunities. The process starts with identifying trends, translating them into challenges to the status quo, and finding and evaluating possible solutions for those challenges. Once a trend and the corresponding challenges are identified, our scouts look for ideas inside and outside of the company. Comparable to founding a start-up company, the identified solutions need to be cast into a business concept and a business plan and incubated with a small and dedicated team. This process takes several years.

It is a well-established fact in the studies of innovation that out of 100 ideas five might make it to the market and only two of them will generate the kind of outsized returns you need to finance and justify the entire endeavor.

What limits the number of projects?

Of course, we cannot work on an endless number of projects. The most important criterion is that chemistry has to be an enabler for the respective technology. Chemistry has to be the key factor for the successful realization of a project.

What are the most fascinating trends you are currently working on?

Our current focus areas are E-Power technologies and Organic Electronics.

Finding answers to the energy challenges of the future is the main concern of the team that works on the growth area E-Power technologies. We are developing new materials and energy-efficient technologies for the electricity value chain. Resource-conserving and CO2-optimized energy production, transfer, and storage, and more efficient use of energy are decisive factors both for environmental and climate protection and for supplying the needs of the growing world population.

One of the main research directions in the E-Power management area is new, all solid materials like magnetocaloric materials. These materials heat up in a magnetic field and cool down again as soon as they are removed from it. A thermal pump with magnetocaloric materials could, therefore, be an alternative to conventional cooling systems.
Another example: Superconductors carry current virtually without loss, so they allow potentially huge savings in generating and transporting electricity. Our subsidiary Deutsche Nanoschicht has developed an innovative process for producing thin films by means of chemical solution deposition. This process allows high-temperature superconductors to be manufactured in a much more efficient and resource-conserving manner.

The growth area Organic Electronics covers all research work and business development activities based on new organic semiconductor materials. The most important applications are: organic light-emitting diodes (OLEDs), displays and light applications, printed electronics for electrical circuits of displays, and radio-frequency identification (RFID) applications. OLEDs are very thin and lightweight luminous elements manufactured from organic semiconductive materials. They emit light, upon receiving electrical current, and can be inserted in both displays and lighting elements. BASF research is focused on developing light emitting dyes, the key components of OLEDs.

Do you have to be especially curious and innovative to work at BASF New Business?

Being curious is indeed a prerequisite for our successful work. Our employees are committed and highly motivated entrepreneurs. Most of them are scientists or engineers by education. For us it is important to have a diverse team of young and experienced colleagues who can judge topics from different perspectives.

Which trends would you like to see develop?

As explained above, we see trends as powerful, long term and non-alterable developments, therefore, there is no point in wishing for a trend to happen. For example, there is no way to alter the trend in demography – it’s just a fact. As a response to those trends, I would like to see more and broader sustainable solutions to be implemented.

Which inventions would you like to live to see?

Solid state cooling is a promising, efficient technology. Theoretical projections indicate an energy-saving potential of up to 50 %. Solid state cooling needs no gaseous cooling agents. It is, therefore, quieter and causes less vibration than conventional compressor refrigerators. We are working on the new generation of solid state materials that are suited for cooling applications.

OLED TV displays are another fascinating invention which is likely to change people’s living rooms. Displays made of organic semiconductor materials can be considerably more energy efficient than the LCD displays that are used today. Their color rendering is more vivid and enables very thin and flexible displays. We are preparing several materials for market launch.

We are looking forward to this. Thank you for the interview, Mr. Riehemann.

Andreas Riehemann, born 1963, studied Mechanical Engineering and Management at Kaiserslautern University, Germany. He joined BASF Group, Ludwigshafen, Germany, in 1991.
After holding several positions at the BASF Coatings Division, he was promoted to Vice President Distribution Business Europe in 2008 and became Managing Director and COO of BASF New Business GmbH in 2012.

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