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Executive Committee Member’s MessagePUTodayToday, we are dealing with problems and issues ofunprecedented dimensions in our region – politicalinstability, liquidity crunch, high inflation, recent terror attacksetc are posing questions on the sustenance of our growth.Indeed the above external environment has and will impactour industry as well. The global polyurethanes industry overthe last one year or more has also been tormented by hugeescalation in feedstock prices which now seems on a pathreversal with a magnitude that at times defies logic.Growth of the MDI molecule globally, has been quite steadyover the last 20 years, thanks to its versatility and the profoundability of market stakeholders to find new applications with it.In the global context, a lot depends upon how the emergingmarkets of Eastern Europe, SE Asia, Russia, Middle East and theIndian subcontinent cope with the current challenges and delivergrowth. Delivering growth with investment economics in theindustry and the market will be the two biggest challenges forour industry.Needless to say certain industry sectors eg Automotive will directlybe affected at least in the short term period, by the externalenvironment. But I reckon there is still a lot of potential thatremains untapped for the MDI molecule in our markets. In mypersonal opinion , organic growth of the market will be underpressure in the short term and therefore it is even more relevanttoday for the industry to focus on MDI market extension , creatingnew applications and if need be storm the forte of thecompeting generic material substrates.It is the responsibility of all the relevant stakeholders of ourPolyurethanes industry including the trade associations to cometogether and have a vision with a clear executable plan.Yours Truly,Arun KumarRegional Manager – ISC and ME, Huntsman PolyurethanesD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y3

PUTodayEditorialA TERRIBLE DISASTER!- Mikhail Bhuta [11 yrs.]What a tragic waste!What a terrible, terrible form of distaste!Down in the dust lie the two buildings of theWorld Trade Center,Where thousands used to enter.Two gigantic wonders gone,Which, once in the sun, gleamed and shone.All at once there was a crash,Which made the structures crumble and smash.The result of this was a terrible fire,Because of which thousands lay on a pyre.Two tall and strong structures goneBecause of two hijacked planes air-borne.After the fire the buildings collapsed,And many rogues headily clapped.The countries of Palestine and Afghanistan,Laughed and celebrated with élan.America swore to take revenge,While others pledged to help avenge,The innocents who sadly perished,And the people who lost the ones they cherished.These lines seem to haunt one’s soul! The terror scenario seems to keepvisiting us at eerily regular intervals, in varying shades and themes – thebottom line being ‘a disaster.’ The world seems to be caught in a whirlpool ofterror – the centripetal force of which, no country seems to have the strength tooverpower, especially so in India’s case at the moment.Humaneness has flown the coupe. The callousness of the act and the repercussionsthereafter, are all along similar lines. The sheer inertia that prevents any kind ofproactive activity against such holocaustic incidents – the lethargic reflexes of thedamage prevention as well as the damage control authorities, in fact, the very lackof any disaster-management body, all leads to this staccato repetition of mayhem.To top it all, the TRP ruled Media and their bitter fight to attract the maximumeyeballs! All this sensationalism merely trivializes the incident in the short ‘shelflife’of public attention. The frenzy and the mass hysteria can only be sustained somuch. A typical scenario is that of: - a newscaster on TV, who went about shootinga volley of questions as was the order of the day, who did not let the guest - eitheron ground zero/studio/or on a tele-conference, reply! He went ahead giving theanswers himself, and if the questioned had the audacity to interrupt/correct him,he just raised his volume! No wonder the ‘expert’ from Israel went on eating, anddrinking his coffee while the newscaster went ahead with the task of getting expertopinions! A British ‘expert’ on the other hand, went ahead with the perfect enactmentof the stiff upper lip. The Indian and Pakistani ‘experts’, just decided to go aheadand squabble, reducing the extremely tragic & grief-stricken incident into a theatricalPunch and Judy show! BUT never underestimate the resourcefulness of our media!The announcer just drowned the squabbling with his booming voice, andenlightened us viewers about the whys and wherefores as well as the solutions tofuture preventions!A more sedate approach form the Media would be much more in keeping with thesolemnity of the calamitous situation. It would maintain the dignity of the departed,as well as ensure a more proactive reaction from the populace.Sincerely,Medha Bhuta4 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

PUTodayContentsC O N T E N T SPUBLISHED BY THE INDIAN POLYURETHANES ASSOCIATIONEDITORMRS. MEDHA BHUTAEDITORIAL TEAMMR. ASHISH SOODMR. K. RAMAMURTHYCOMPILATION & SELECTIONMR. ARUN KUMARMR. MAHESH GOPALASAMUDRAMDESIGN CONCEPTMR. MUKESH BHUTAGRAPHIC DESIGN & LAYOUTRED SKY DESIGNSPRODUCTION & EXECUTIONMR. K. RAMAMURTHYCHAIRMAN EMERITUSMR. M. SARANGAPANIIPUA OFFICE BEARERSCHAIRMANMR. RAHUL GAUTAM 0120 – 4162220 / 4162200 rahul@sheelafoam.comEXECUTIVE COMMITTEE MEMBER’S MESSAGE .. 3EDITORIAL ....................................... 4CREDITS + CONTENTS .......................... 5INDUSTRY UPDATES ............................. 7ECONOMIC UPDATES ........................... 11INTERNATIONAL NEWS ........................... 16PRODUCT NEWS ................................. 20TECHNICAL UPDATES ............................ 29TECHNICAL ARTICLE ............................. 30HEALTH & SAFETY .............................. 38MARKET TRENDS UPDATES ..................... 41PREVIEWS & REPORTS .......................... 48PEOPLE’S UPDATE .............................. 49EVENTS & TRENDS ............................. 50VICE CHAIRMANMR. G. RAMACHANDRAN 044-25941025 md@manalipetro.comMr. MUKESH BHUTA 022-27680303 mbhuta@expanded.co.inTREASURERMR. GIAN JAIN 011-27138428 juhipufoam@yahoo.co.inSECRETARYMR. K. RAMAMURTHY 044-24995923 tvkkrpu@md3.vsnl.net.insecretary@pu-india.orgIPUA EXECUTIVE COMMITTEE MEMBERSMR. JAGANNATH SARANGAPANI 040-23701871 jagannath@ufoam.comMR. G. ANAND 022-27787396 anand_g@huntsman.comMR. MANDAR P JOSHI 022-67127665 mandar.joshi@basf.comMR. DEEPAK T. MEHTA 079-26304652 deepakmehta@tirupatifoam.comMR. BALRAM U. NICHANI 080-27832851 balram.nichani@polyflexindia.comMR. AJAY DURRANI 0120-2589040 ajay.durrani@bayerbms.comMR. M. G. BOHRA 044-25952001 mgb@amulpolycure.comMR. H. S. KOCHAR 011-204355533 kochar@pfeda.netMR. S. ARUN 02642-247181 arun@gnfc.inMR. RABINDRA JHAJHARIA 033-22298904 multiwynfoams@multiwynfoams.comMR. CHANDRAKANT NAYAK 022-67978500 nayak@dow.comMR. SANJAY SANGHI 022-40059350/51/52 sanjay.sanghi@momentive.comMR. PRANAYA PRADHAN 09731303238 pranaya.pradhan@shell.comD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y5

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PUTodayIndustry UpdatesPolyurethane Chemicals And Products In Europe, MiddleEast And Africa (EMEA) – 2008 Volume 3 Provides A DetailedAnd Accurate Assessment Of The Polyurethane IndustryDUBLIN, Ireland — (BUSINESS WIRE)Research and Marketswww.researchandmarkets.com/research/980747/polyurethane_chemi) hasannounced the addition of the“Polyurethane Chemicals AndProducts In Europe, Middle East AndAfrica (EMEA) - 2008 Volume 3”report to their offering.Description for PolyurethaneChemicals And Products In Europe,Middle East And Africa (EMEA) - 2008We are completely updating our indepthmarket report onPolyurethane Chemicals andProducts in Europe, Middle East andAfrica. The new report will featurean expanded executive summary inthe form of a powerpointpresentation. The data will also bepresented in a excel format.Geographical coverage of thereport is as follows: WesternEurope (12 countries/regions) Austria, Benelux, France,Germany, Ireland, Italy, NordicRegion, Portugal, Spain,Switzerland, United KingdomEastern Europe (9 countries/regions) Czech Republic, CIS, Hungary,Poland, Russian Federation, SlovakRepublic, Slovenia, Other (BalticStates, Romania, Bulgaria)Middle East and Africa (6 countries/regions) Egypt, Iran, South Africa,Maghreb Countries, Turkey, OtherMiddle East and AfricaIt provides, by country,consumption estimates for thefollowing polyurethane rawmaterials:MDI (MMDI & PMDI)TDIAliphatic IsocyanatesStandard Polyether PolyolPolyether Graft CopolymerPolyolAcrylic PolyolPolyester PolyolIn printed format, this publicationis presented in five volumes,containing over 1000 pages ofmarket information, including over450 tables detailing production ofpolyurethane products and relatedraw material consumption.It also provides, for each country,production data for the followingend-use market sectors:Flexible FoamPolyether & Polyester Slabstock,CMHR Slabstock, Moulded Foam forTransport Seating, Moulded Foamfor Furniture, Carpet Backing &Sound Insulation, Semi-rigid,Integral Skin FoamRigid FoamContinuous and DiscontinuousPanels, Slabstock, Sprayed Foam,One Component Foam (OCF), In-situRefrigeration, In-situ Nonrefrigeration,Pre-insulated Pipe,Moulded Rigid FoamCoatingsAuto OEM, Architectural (interior/exterior), Roof, Tank & Deck,Maintenance, Plastic (nonautomotive)Coatings, Industrial,Auto Refinish, Marine/Offshore,Aircraft, Waterproof, Transport,Wood/Furniture, Textile & Leather,FloorsAdhesivesAutomotive, Construction, FlexiblePackaging, Footwear, GeneralAssemblySealantsConstruction, Auto Direct Glazing,Insulated Glazing, TransportElastomersCast, TPUs, Fibres, MicrocellularFootwear, Technical Microcellular,Synthetic Leather ResinBindersForest Products, Rubber Crumb,Foundry Core,This latest edition of our reportaims to provide a detailed andaccurate assessment of thepolyurethane industry within theEMEA region.8 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Economic UpdatesPUTodayIndia’s central bank governor on – economy, policyMUMBAI, Dec 6 (Reuters) -India’s central bank cut itsshort-term lending and borrowingrates by 100 basis points each andannounced a slew of othermeasures on Saturday to try toshore up a slowing economy.Following are quotes from ReserveBank of India Governor DuvvuriSubbarao at a media conference toannounce the measures.On Impact Of Mumbai Attacks“The terrorist attacks are of coursevery tragic and should becondemned. But the economicimpact of the crisis is difficult toprecisely estimate. I am hopefuland confident that we will be ableto return to normalcy, make anadjustment, and our business andindustries will continue theirregular activity, notwithstandingthe terrorist attack.”On Business Confidence“Business confidence has beenaffected and corporate margins aredented. Yes, there is a downturnand the intent of the measures isto arrest the downturn and revivethe growth momentum.”On Banks Not Cutting LendingRates“Monetary transmission takes time.Also, there are a number of othervariables at play, not purelymonetary transmission. There is anuncertain crisis, nobody reallyknows what is going to happen.There is admittedly some riskaversion. There is a tendency tomaintain more than adequateliquidity.“I am only hoping that today’smeasures coming on top of the cutswe had done will send a positiveand decisive signal to markets”.On Statutory Liquidity Ratio“Our position on the SLR remainsunchanged. We believe that the SLRrequirement has stood the bankingsystem in good strength at a timeof crisis like this, though thereduction in SLR is a long-termgoal, we are not immediatelycontemplating a substantialchange in the SLR requirement”On Role Of Reverse-repo Rate“For a long time, the reverse-reporate was not operational... theoperational rate was the repo rate,but since the beginning ofNovember the reverse-repo rate hasbecome material. And indeed it istrue, we expect that banks will takea signal from the reverse repo rateand lend to the productive sectors.”On Liquidity“We believe that the liquidity is verycomfortable now, and I want toensure the financial sectorcommunity that Reserve Bank willendeavor to maintain comfortableliquidity conditions using all theinstruments available to us.”On Cash Reserve Ratio“It is perhaps unfair to say that wehave not used the CRR instrument.Since October 3, to the last cut...we have reduced the CRR from 9percent to 5.5 percent, so by 350basis points which I believe issignificant in such a small time. Weare closely and continuouslymonitoring the liquidity situationand the liquidity situation is notjust comfortable, but it is morethan comfortable.”“From the central bank, I want tosay that we will endeavor tomaintain comfortable liquidity.There are a number of measures tomaintain liquidity and CRR is justone of them, and if we feel in ourjudgment that the CRR should becut then we will do that.” (Reportingby Swati Bhat and V. Ramakrishnan;Editing by John Mair)Despite higher sales, consumerdurables to report low profitsCost pressures pull margins downSource : Hindu Business LineMajor players raised prices by up to 7 per cent across categories, but thatwas inadequate to defray the higher costs.R. RavikumarChennai, Dec. 5 Despite a highergrowth in sales, consumerdurable makers are set to reportlow or no growth in profits, owingto cost pressures.White goods manufacturers haveposted a 15 per cent growth in salesin 2008 (up to November) over2007, thanks to growth in frost-freerefrigerators and washingD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y11

PUTodayEconomic Updatesmachines. The low penetration ofthese products (7-8 per cent of thepotential market) is said to be thereason for the growth of demandfor these products.For sure, the current year’s growthrate is lower than what waswitnessed in the previous years —20 per cent in 2007. Yet,considering factors such as dearermoney, limited finance options,early monsoon and the ‘meltdownmood’, a 15 per cent growth isheartening, say experts.But the buoyancy in sales has atbest helped preserve thebottomline. Cost pressures, arisingout of higher prices of inputs suchas steel, copper and polyurethanefoam (used as lining inrefrigerators), combined with thedrooping rupee, pulled marginsdown, sources in the industry say.(Even after the recent drop inprices, they are still higher thantheir 2007-levels.)Defraying costsMajor players including Samsung,LG Electronics, Godrej andWhirlpool raised prices by up to 7per cent across categories so far, butthat was inadequate to defray thehigher costs.According to Mr V. Ramachandran,Director (Sales and Marketing), LGElectronics India, most of the topendmodels of washing machines,refrigerators and air-conditioners areimported as completely-built unitsor brought in as components andassembled here. As the rupee slid 38per cent against the US dollar (Rs 39a dollar in Nov 2007 to Rs 50.6 today),the landed costs of these productshave gone up as much.Even the products manufacturedlocally have importedcomponents.For these products, for every onerupee swing in the currency value,the cost of manufacture will correctby 0.65 per cent.Any increase in price could not bepassed on to the customer becauseof the stiff competition.According to Mr Kamal Nandi, Vice-President, Sales and Marketing,Godrej Appliances, the “very shortsummer” this year further hit salesof refrigerators and airconditioners.Godrej expects toachieve a turnover of Rs 1,800 croreas against Rs 2,000 crore last year.Had a tough year? Make Peace and move on...Harvard Business PublishingThis week’s question for Askthe Coach:My bank has lost billions of dollarsbecause of bad investments - whichI didn’t make. Now I am facing budgetcutbacks, getting no bonus, reducingmy staff, and being expected tocontribute more. This really makesme angry! Any suggestions?If it is true that “misery lovescompany,” you have a lot ofcompany. In my work in thefinancial services world this year, Ihear your frustration - and yourquestion - over and over again.In one bank that I know well almostevery part of the business had agreat year - except the division thatlost billions of dollars and negatedall of the other divisions’ success.This made life very tough for theemployees in the successfuldivisions.One of the most commoncharacteristics of successful peopleis that we have a very strong“internal locus of control.” In otherwords, we believe that our successin life is a function of themotivation and ability that webring to the world. Less successfulpeople tend to see success as afunction of external factors - or theenvironment.Normally this belief in our controlover our own destiny works in ourfavor. It makes us motivated andencourages us to build our skills.It helps us take responsibility. (Italso keeps us from wasting moneyon lottery tickets!)When negative environmentalfactors impact our success, ourstrong internal locus of controlmakes it hard for us to accept thereality of the externalenvironment. We begin to getangry because “It isn’t fair,” and weask questions like, “Why am I beingpunished - for their mistakes?”I cannot help your company getback the billions of dollars it justlost. I cannot help you get a bonus12 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Economic UpdatesPUTodayor save your valued staff members.I will try to help you make the bestof the situation that you face. Mysuggestions are: If you choose to stay with thecompany, realize that we all makemistakes. The individuals whomade bad decisions - or their bosses- are just humans. They aren’t Gods.Historically, these people have madesome very good bets. Recently theymade some very bad bets. You don’thave to love them, but just acceptthem for being who they are.Carrying around anger directedtoward your fellow employees doesnot help you, your company or thepeople who work with you. Forgive yourself. You are anadult. You chose to work with thiscompany. In a way, you made a bet.Sometimes our choices don’t workout as we had planned. This doesnot make you a bad person - just ahuman being. At a deeper level,the person you are really mad atmay be yourself. Don’t bepersonally ashamed because yourcompany has lost money. While youcan own your own performance,you can’t own the performance ofpeople that you do not control. Reassess the situation. Oneof greatest challenges for investorsis to learn the meaning of “sunkcost.” What’s done is done. Let itgo. Objectively reconsider yoursituation. Given the world thatexists today, do you want to stay?If so, make the best of where youare. Do you want to leave? If so,begin searching for another job. Remember your deepermission in life. Behave in a waythat optimizes benefit for yourselfand the people that you love. Don’tcut off your nose to spite your faceby letting your anger override yourlogic. I have seen many otherwisesmart people make stupiddecisions when they were angry.Don’t let this happen to you.I hope that these suggestions arehelpful.I love hearing from our readers.Please send in comments with yoursuggestions for how goodprofessionals can make the best oftoday’s tough conditions.BASF preparing for tough business environmentSource : BASF website Third quarter 2008: Strong sales growth (+13percent, disregarding currencyeffects +18 percent) due tosubstantial price increases andvolume growth Earnings improvement inoperating segments (+7 percent)despite significantly higher rawmaterial costs and impact of thehurricanes in the United States EBIT before special items ofBASF Group declines 8 percentdue to significant expenses inOther Focus on cash flow, operationalexcellence and sustainability -“NEXT” program to increaseefficiency started: Earningscontribution of more than •1billion per year as of 2012 Outlook 2008: BASF will makeevery effort to match the previousyear’s excellent earningsLudwigshafen, Germany - October30, 2008 - BASF SE - The ChemicalCompany - has ended the thirdquarter with solid results in asignificantly more difficulteconomic environment. Alloperating divisions increased theirprices, and volumes rose in almostall segments. Overall, sales rose by13 percent to •15.8 billion.Adjusted for currency effects, salesgrew by 18 percent.BASF also increased earnings in itsoperating segments (excludingOther) by 7 percent - despitefurther increases in raw materialcosts, declining demand fromimportant customer industries andthe hurricanes on the U.S. GulfCoast, which alone reducedearnings by more than $100million. Income from operations(EBIT) before special items of BASFGroup declined by 8 percent, inparticular due to significantlylower earnings in Other. Here,significant expenses from hedgingnaphtha purchases againstincreasing prices were incurred asa result of the fall in oil pricestoward the end of the quarter.Dr. Jürgen Hambrecht, Chairman ofD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y13

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Economic UpdatesPUTodaythe Board of Executive Directors ofBASF SE said: “The impact of theglobal financial crisis on the realeconomy is speeding up andhitting harder. The economic skidmarks can no longer be ignored.The decline in demand inimportant markets, stockpiling byour customers and the fall in oilprices are all signs of a recessionarytrend that is likely to sharpen in2009.”Worldwide, BASF is responding todeclining demand by adjustingcapacity utilization rates andbringing forward maintenancerelatedshutdowns. In addition toongoing activities to reduce costs,the company has launched a newefficiency program, “NEXT,” inOctober with the goal of increasingoperational excellence andeffectiveness.NEXT stands for a new dimensionof value creation at BASF. Theprogram involves all regions,divisions and functions at BASF andencompasses more than 500individual projects. These rangefrom the simplification of processesand increased bundling ofresources through to the use ofnew IT technologies. Together withits ongoing efficiency programs,BASF expects NEXT to contributemore than •1 billion to earningsper year as of 2012. A largeproportion of this amount isexpected to be achieved as earlyas 2009 and 2010.BASF will make every effort tomatch the previous year’sexcellent earningsIn the months ahead, Hambrechtexpects many challenges for BASF’sbusiness: “We have therefore revisedour assumptions and are nowreckoning with global economicgrowth in 2008 of below 2.7percent and chemical productiongrowth of below 2.0 percent. Weexpect an average oil price (Brent)of $105 per barrel in 2008 and anaverage euro/dollar exchange rateof $1.45 per euro. In addition tovolatile raw material costs, we seerisks in a further economicdownswing.”In view of these underlyingconditions and based on theassumption that there will be nofurther adverse developments thatcannot be foreseen at present, BASFhas revised its outlook for the fullyear: The company expects toincrease sales in 2008 and willmake every effort to match theprevious year’s excellent EBITbefore special items.Sales increase in all segmentsIn the Chemicals segment, BASFincreased sales significantly by 19percent, above all due to higherprices and slightly higher volumes.Sales increased in all divisions. EBITbefore special items declined,primarily as a result of lowermargins for cracker products aswell as plant shutdowns due to thehurricanes on the U.S. Gulf Coast.Sales in the Plastics segmentincreased by 4 percent. Due to theslowdown in the automotive andconstruction industries, higher rawmaterial costs could not be passedon sufficiently to the market. Inaddition, earnings were negativelyaffected by plant shutdowns dueto the hurricanes on the U.S. GulfCoast.The Performance Productssegment posted a 5 percentincrease in sales. Prices were raisedsubstantially, in particular in theCare Chemicals division. EBITbefore special items rosesignificantly thanks to the strongperformance of Care Chemicals andreduced fixed costs in all divisions.The Functional Solutionssegment increased sales slightly by1 percent despite the substantiallyreduced demand from theautomotive and constructionindustries. Earnings declined in theConstruction Chemicals andCoatings divisions because higherraw material costs could not bepassed on fully to the market. Theincrease in earnings in the Catalystsdivision was not sufficient tocompensate for this.BASF achieved sales growth of 11percent in the AgriculturalSolutions segment thanks tohigher volumes and prices.Adjusted for currency effects, salesgrew by 17 percent. The relativelyhigh price level for agriculturalproducts resulted in strongdemand for innovative cropprotection agents. Although thethird quarter generally tends to beweak due to the seasonal natureof the business, the companyincreased earnings significantly andreached a record value.Sales in the Oil & Gas segmentincreased by 46 percent, inparticular due to the higher oilprice and a rise in volumes in theNatural Gas Trading business sector.Earnings also rose considerably asa result of the oil price. Earningsin Natural Gas Trading werenegative as a result of the time lagin adjusting sales prices topurchase prices.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y15

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International NewsPUTodayBASF comes closer to acquiring CibaVoting rights and registration restrictions removedBASF representatives elected to Ciba’s Board of DirectorsSecond trading line to open tomorrow for tendered sharesLudwigshafen, Germany –December 2, 2008 – BASF hascome a step closer to acquiringCiba. At the Extraordinary Meetingof Shareholders of Ciba Holding AGheld today in Basel, Switzerland,the voting rights and registrationrestrictions in the articles ofassociation of Ciba Holding AGwere removed with effect as of thesettlement date. At the same time,three representatives of BASF – Dr.Hans-Ulrich Engel, Hans-WaltherReiners and Dr. Jörg Buchmüller –were elected to Ciba’s Board ofDirectors. The election is alsoeffective as of the settlement date.All current members of Ciba’sBoard of Directors will resign as ofthe settlement date. The motionswere approved by significantlymore than 90 percent of the sharecapital represented. As a result,further conditions of BASF’s publictender offer have been fulfilled.The completion of the transactionis still subject to approval by therelevant antitrust authorities,which is expected in the firstquarter of 2009.From tomorrow (December 3) untilthe settlement date, the tenderedCiba shares can be traded on asecond trading line of the SIX SwissExchange. The shares remaintendered. On the settlement date,they are automatically transferredto BASF against payment of theoffer price of CHF 50.00 irrespectiveof the share owner on that date.The transfer of shares to BASF andthe payment of the offer price willtake place on the settlement date.All information about BASF’s offer,including the offer prospectus, isavailable on the Internet atwww.basf-info.com.About BASFBASF is the world’s leadingchemical company: The ChemicalCompany. Its portfolio ranges fromoil and gas to chemicals, plastics,performance products, agriculturalproducts and fine chemicals. As areliable partner BASF helps itscustomers in virtually all industriesto be more successful. With itshigh-value products and intelligentsolutions, BASF plays an importantrole in finding answers to globalchallenges such as climateprotection, energy efficiency,nutrition and mobility. BASF hasmore than 95,000 employees andposted sales of almost •58 billionin 2007. BASF shares are traded onthe stock exchanges in Frankfurt(BAS), London (BFA) and Zurich(AN). Further information on BASFis available on the Internet atwww.basf.com.Important NoticeThis release is not intended fordistribution to, or use by, anyperson or entity in any jurisdictionor country where such distributionor use would be contrary to locallaw or regulation.This release has been prepared byBASF. No representation orwarranty (express or implied) ofany nature is given, nor is anyresponsibility or liability of anykind accepted, with respect to thetruthfulness, completeness oraccuracy of any information,projection, statement or omissionin this presentation.This release does not constitute,nor does it form part of, any offeror invitation to buy, sell, exchangeor otherwise dispose of, or issue,or any solicitation of any offer tosell or issue, exchange or otherwisedispose of, buy or subscribe for, anysecurities, nor does it constituteinvestment, legal, tax, accountancyor other advice or a recommendationwith respect to suchsecurities, nor does it constitute thesolicitation of any vote or approvalin any jurisdiction, nor shall therebe any offer or sale of securities inany jurisdiction in which such offer,solicitation or sale would beunlawful prior to registration orqualification under the applicablesecurities laws of any suchjurisdiction (or under exemptionfrom such requirements).D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y17

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International NewsPUTodayBayer significantly strengthens its presence in ChinaSource : Bayer WebsiteStartup of 350,000 tons/year MDI train/ Groundbreaking for 250,000 tons/year TDI plant / Isocyanate productionalso to be expanded in Europe in themedium termShanghai, October 17, 2008 – BayerMaterialScience has successfully startedproduction at its new 350,000 tons/yeardiphenylmethane diisocyanate (MDI)complex at the Bayer Integrated SiteShanghai (BISS). The new world-scaleplant is the largest MDI facility of its kindin the world. Furthermore, the companyhas now broken ground for a 250,000tons/year toluene diisocyanate (TDI) plantat BISS which is scheduled to come onstream in 2010. “With these projects BayerMaterialScience is emphasizing itscommitment to the growth markets inChina and the whole Asia Pacific region.Innovative process technologiesstrengthen our cost leadership inisocyanate production and thus ourcompetitiveness,” said Patrick Thomas,Chairman of the Board of Managementof Bayer MaterialScience, at a pressconference in Shanghai on Friday.MDI is a raw material used primarily forthe production of polyurethane rigidfoams, which have better insulatingproperties than any other material on themarket. Two of their main applicationsare in the refrigeration chain and asthermal insulation in the buildingindustry. TDI is used in large quantitiesin the production of flexiblepolyurethane foam for upholsteredfurniture, mattresses, and car seats.For Bayer MaterialScience, China isalready the most important market in theAsia Pacific region and currently its thirdlargest national market worldwide. “Weare confident that our materials willcontinue to exhibit good growth ratesthere,” said Thomas. China is already theworld’s largest single market forpolycarbonates, and it is expected tobecome the largest global consumer ofpolyurethanes by 2015.Shaping the future in Chinawith advanced processtechnologyThe new facilities set standards for energyefficientand environmentally-responsibleproduction. The new TDI facility inShanghai, for example, features themodern Gas Phase Process. This enablesenergy savings of up to 60 percentcompared with a conventional plant ofthe same size. The new process technologyuses up to 80 percent less solvent, andcuts investment costs for this type of largescalefacility by some 20 percent. “Thisenables us to further consolidate ourleading position on the world market forpolyurethanes with optimized coststructures,” explained Patrick Thomas.In addition, the oxygen depolarizedcathode (ODC) technology used to recyclechlorine at the Bayer Integrated SiteShanghai yields 30 percent savings inenergy use compared with conventionaltechnology. Thomas pointed out how thecompany is contributing to China’s effortsto improve the energy-efficiency of itsindustries: “By using advanced technologyand an energy-efficient setup at the site,the Bayer Integrated Site Shanghai is ableto save approximately 100 megawattscompared with conventional productionplants. These savings can supply up to10,000 homes,” he said.Other production facilitiesfor the Asian marketJust last month, the company started upits 20,000 tons/year polyurethanedispersions plant, which is the first unitproducing waterborne polyurethanecoating raw materials in China.Waterborne coating systems use little orno solvent, thereby reducing emissionsof volatile organic compounds (VOCs)during application.The company has also completed theconstruction of its second polycarbonateline, doubling its capacity for the hightechengineering plastic Makrolon® to200,000 tons/year. The inauguration ofthis second production line will dependon how the market develops.Products for improved climate protectionare another growth driver in China. Bayermaterials help to improve housinginsulation, for example, by contributingto reduced heating costs and lower CO2emissions. Over its entire life cycle, rigidpolyurethane foam saves around 70 timesas much energy as is used in itsproduction. In addition to polyurethaneinsulating boards, multiwall sheet madeof Makrolon® polycarbonate is anotherexample of the energy-efficient use ofmodern materials.New TDI production plantplanned for integrated site inDormagenBayer MaterialScience also plans to extendits isocyanate production significantly inthe Europe, Middle East, Africa (EMEA)region in order to meet rising demandthere. A new world-scale plant for TDI withan annual capacity of 300,000 tons is slatedfor construction at the Dormagen/Uerdingen integrated site in Germany. Itwill replace the existing TDI plants at theDormagen and Brunsbüttel sites. MDIproduction at Brunsbüttel will beexpanded to a total capacity of 400,000tons/year by making use of the existingcapacity of 160,000 tons/year and theexisting infrastructure, and by convertingthe present TDI plant to an MDI facility.Given the right business conditions, i.e.political acceptance and the availability ofa suitable infrastructure for raw materialsand energy, the two projects are scheduledto be completed by 2013 at a totalinvestment cost of about EUR 300 million.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y19

PUTodayProduct NewsMerquinsa Develops World’s First Ether-basedBio TPUBarcelona, Spain – December3, 2008Merquinsa announces today thedevelopment of the worldfirst ether-based Bio TPU grades atthe Bioplastics Awards Conference(Munich, Dec. 3rd & 4th).This new plant-based developmentis the last addition to the growingrange of Merquinsa´s Bio TPU for“Green” injection moulding,extrusion and adhesiveapplications.These new Bio TPU grades will bemarketed under the Pearlthane®ECO brand with a renewablecontent up to 60 % according toASTM D6866, and will offer analternative to petroleum-basedTPU and TPE, with excellentmechanical properties, abrasion,scratch resistance, processabilityand Recyclability.A preliminary life cycle analysis(LCA) indicates that manufacturingPearlthane® ECO results in 40 % lessglobal warming emissions.About MerquinsaMerquinsa is a leadingthermoplastic polyurethane (TPU)specialty producer, providinginnovative products for injectionmoulding, extrusion, calendering,melt coating, compounding andadhesive applications.Innovation in Bioplastics” (Cologne,Germany) and in 2008 at CPIpolyurethane Innovation Awards,San Antonio, Texas.Merquinsa’s headquarters are inBarcelona, Spain with regionalcentres in Asia and North America.For more information aboutMerquinsa, PEARLTHANE®,PEARLCOAT®, PEARLBOND®,and PEARLSTICK®, Specialty TPUresins, please visit our Web site atwww.merquinsa.com or call at+ 34 93 572 1100.Merquinsa was shortlisted in 2007at EPN’s Bioplastics Awards under“BestMerquinsa develops World First Ether-based Bio TPU20 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Product NewsPUTodayFEA-1100: A Novel Foam Expansion Agent forPolyurethane FoamFEA-1100 is a novel foam expansion agent for polyurethane foams developed by DuPontFluoro-chemicals. FEA-1100 is characterized by zero ozone depletion potential, low globalwarming potential, low vapor thermal conductivity, non-flammability, and low toxicity.Polyurethane and polyisocyanurate foams produced employing FEA-1100 as the foamexpansion agent are characterized by good dimensional stability, and excellent thermalinsulation properties - R values for foams produced using this new foam expansion agentexceed those obtained with current agents such as HFC-245faPrior to 1995, the primary foamexpansion agent for rigidpolyurethane foams was CFC-11(CFCl 3), based in part on CFC-11’slow thermal conductivity (low k-factor). However, due to theimplication of chlorofluorocarbons(CFCs) in the destruction ofstratospheric ozone, theproduction of CFCs) was banned bythe Montreal Protocol in 1995.CFC-11 represented the “FirstGeneration” of foam expansionagents. Following the ban of CFCs,the search was begun for “Second-Generation” foam expansionagents. Agents were sought whichpossessed properties similar to CFC-11 in terms of foam processingcharacteristics and low vaporthermal conductivity but did notpresent as large a threat tostratospheric ozone as the CFCs.Hydrochlorofluorocarbon HCFC-141b (CH 3CFCl 2) met many of therequirements of a CFC-11replacement, while presenting areduced threat to the stratosphericozone layer. HCFC-141b has a lowerozone depletion potential (ODP)compared to CFC-11, and foundwide employment as a CFC-11replacement. A disadvantage ofHCFC-141b, however, is its highervapor phase thermal conductivitycompared to CFC-11, which rendersHCFC-141b less efficient atprovindig thermal insulation.Shortly following the introductionof HCFC-141b as a substitute forCFC-11 in foam expansionapplications, regulatory agenciesworldwide began to proposeproduction limits and bans on allozone depleting substances (ODSs),both CFCs and HCFCs, and as aresult HCFCs are slated for eventualphaseout.The “Third-Generation” of foamexpansion agents were developedin response to the regulation ofthe second generation HCFC agents,and are comprised of hydrofluorocarbons(HFCs). HFCs arecharacterized by zero ODPs, i.e.,the HFCs do not contribute to thedestruction of stratospheric ozone.The primary HFC expansion agentsdeveloped for rigid polyurethanefoam are HFC-245fa (CF 3CH 2CF 2H)and HFC-365mfc (CF 3CH 2CF 2CH 3).The HFCs do not contribute toozone depletion, but a majordisadvantage of the HFCs is theirincreased vapor phase thermalconductivities compared to boththe HCFCs and CFCs. HFC-245fa hasa relatively low boiling point of 15oC, which makes the handling ofHFC-245fa and the processing offoams employing it troublesomecompared to the case for higherboiling foam exapnasion agentswhich are liquid at roomtemperature. HFC-365mfc is aliquid at room temperature, butis characterized by thedisadvantage of being a flammablecompound.In addition to the use of HFCs toreplace HCFC-141b in foamexpansion applications, expansionagents, the use of hydrocarbons asfoam expansion agents forpolyurethane foams has beendeveloped. Typical hydrocarbonsemployed as expansion agents forpolyurethane foams include thepentanes (cyclopentane, pentane,isopentane), methyl formate, andmethylal. In addition to theirflammability, the hydrocarbons arealso characterized by thermalconductivities even greater thanthose of the HFCs, leading to poorthermal insulation properties.In recent years concerns overclimate change have intensified,and the polyurethane industry isD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y21

PUTodayProduct Newsseeking foam expansion agents notonly characterized by zero ODP, butalso by lower global warmingpotentials (GWPs) compared tothose of the HFCs. Taking intoconsideration currentenvironmental concerns, the idealfoam expansion agent shouldsatisfy the following requirements:Low vapor thermal conductivityNonflammableLiquid at room temperature (bp> 25 o C)Low toxicityZero ODPLow GWPChemically, thermally stableSoluble in formulationLow rate of diffusionEconomically feasiblefor polyurethane foams whichmeets the above requirements.Properties of this novel foamexpansion agent, FEA-1100, areshown in Table 1.FEA-1100 is characterized by zeroozone depletion potential, lowglobal warming potential, and verylow acute toxicity.FEA-1100 is a liquidatroomtemperature, andhence the problemsassociated with theuse of gaseous,lower boiling agentssuch as HFC-245faare eliminated.Table 1. Properties of FEA-1100PropertyValueBoiling point> 25 o CDensity, liquid @ 20 o C 1.4 g/cm 3l gas 25 o C mW/mK 10.7LC 50, 4h rat> 106,000 ppmAmes testNegativeChromosomal aberration NegativeODP 0Flammability testingGWP (100 yr ITH) 5performed inaccordance withFlash pointNoneASTM E 681 StandardFlammability limits NoneTest Method forConcentration LimitsDuPont Fluorochemicals hasdeveloped a novel “Fourth-Generation” foam expansion agentof Flammability of Chemicals (Vaporsand Gases) indicate FEA-1100 isnonflammable at the standard testTable 2. Typical Results: Initial R ValueFoam Foam Expansion Agent Initial R valuePolyurethane FEA-1100 7.1HFC-245fa 6.6Polyisocyanurate FEA-1100 7.7HFC-245fa 7.2Polyurethane FEA-1100/Cyclopentane 7.3FEA-1100 7.2Cyclopentane 6.6temperature of 60 o C and also atelevated temperatures of 100 o C.Polyurethane foams produced withFEA-1100 are characterized by lowfoam density, uniform cell size andhigh R values. Figure 1 shows anexample of a polyurethane foamexpanded with FEA-1100 comparedto an identical foam expanded withHFC-245fa. R values for foamsexpanded with FEA-1100 are higherthan those for foams blown withHFC-245fa, and upon aging, thefoams expanded with FEA-1100retain R values higher than thoseexpanded with HFC-245fa (see Table2).Polyisocyanurate foams producedwith FEA-1100 are alsocharacterized by low foam density,uniform cell size and high R values.Figure 2 shows an example of apolyisocyanurate foam expandedwith FEA-1100 compared to anidentical foam expanded with HFC-245fa. Initial R values for foamsexpanded with FEA-1100 are higherFigure 1 Figure 2 Figure 322 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Product NewsPUTodaythan those for foams blown withHFC-245fa, and upon aging, thefoams expanded with FEA-1100retain R values higher than thoseexpanded with HFC-245fa.The use of mixtures of physical foamexpansion agents is well known, andsuch mixtures can be useful inoptimizing foam performance andmeeting specific customer demandssuch as reduced expansion agentflammability, reduced vaporpressure, etc. Figure 3 shows anexample of a typical polyurethanefoam expanded with a FEA-1100/cyclopentane azeotropic mixturecompared to an identical foamexpanded with cyclopentane Thepolyurethane foams produced withthe FEA-1100/cyclopentaneazeotrope are characterized by lowfoam density, uniform cell size andhigh R values. Initial R values forfoams expanded with the FEA-1100/cyclopentane azeotrope are higherthan those for foams expanded withcyclopentane or neat FEA-1100BASF buys polyurethane specialities business forcar window encapsulation from Recticel Technology opens up additional potential in the growing market for solar panelapplicationsLudwigshafen, Germany andBrussels, Belgium – BASF hassigned an agreement with Recticelto acquire the company’sworldwide compounds business forpolyurethane (PU) systems for glassencapsulation. The transaction,which is subject to approval by therelevant antitrust authorities,involves the polyurethanespecialties business includingRecticel’s patented aliphatic lightstable compounds under thebrand name Colofast ® .The special PU technology is mainlyemployed for car glassencapsulation, an attractive nichemarket for the safe and tightconnection of glass panes and carbody. PU glass encapsulation is usedfor 7 percent of all glass applicationsin the automotive industryworldwide. In future the technologywill also be used to considerablysimplify and speed up theproduction process of solar panels.“By acquiring this business, BASF willachieve an excellent globalThe special PUtechnology is mainlyemployed for car glassencapsulation, anattractive niche marketfor the safe and tightconnection of glasspanes and car body.position in this attractive specialtymarket,“ said Jacques Delmoitiez,President of BASF’s Polyurethanesdivision. “At the same time we areadding a further innovativetechnology to our alreadycomprehensive portfolio of PUsolutions. This will open up greatpotential in the growing marketfor solar panel applications.“PU Solutions by BASFBASF is the leading supplier ofpolyurethane basic products,systems and specialties. With itsglobal network of more than 30polyurethane system houses and itscomprehensive product and serviceportfolio, BASF is the preferredpartner of its customers in manyindustries. With its world-scaleplants BASF secures its leadingD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y23

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Product NewsPUTodaymarket position in themanufacture of polyurethane basicproducts in all regions of the world.About BASFBASF is the world’s leadingchemical company: The ChemicalCompany. Its portfolio ranges fromoil and gas to chemicals, plastics,performance products, agriculturalproducts and fine chemicals. As areliable partner BASF helps itscustomers in virtually all industriesto be more successful. With itshigh-value products and intelligentsolutions, BASF plays an importantrole in finding answers to globalchallenges such as climateprotection, energy efficiency,nutrition and mobility. BASF hasmore than 95,000 employees andposted sales of almost •58 billionin 2007. Further information onBASF is available on the Internetat www.basf.com.Bayseal Polyurethane Foam Maintains theHighest Standard in Energy-Efficient HomesPittsburgh — Usingpolyurethane foam to insulatethe walls, attics, crawl spaces andfoundations of a home is widelyrecognized as one of the best waysto save energy and dramaticallyreduce residential heating andcooling costs. Yet, without theproper installation or integrationinto the rest of a home’s energysystems, no insulating product canwork up to its full potential. That’swhy BaySystems, a marketing unitof Bayer Material Science LLC (BMS),has teamed with EnergyWise, oneof the nation’s leading thermalengineering firms, to co-market anew national brand that promotesa systems approach to residentialinsulation applications. The brand– Energywise – is a guaranteedenergy savings building solutionthat combines expert structuralenergy analysis with a network ofpreferred contractor installers inorder to maximize the performanceof BaySystems’ Bayseal spray foaminsulation products.“Many people think they’vecovered all the bases in terms ofenergy efficiency by utilizingpolyurethane foam insulation innew construction, but it can’t do“Many people thinkthey’ve covered all thebases in terms of energyefficiency by utilizingpolyurethane foaminsulation in newconstruction, but itcan’t do the job alone,”said Richard Rue, CEO,EnergyWise Structures.the job alone,” said Richard Rue,CEO, EnergyWise Structures. “TheEnergywise ‘systems approach’ tobuilding a foam-insulated homemeans proper engineering of theentire package: the mechanicalsystems, doors and windows,insulation and caulking to work inharmony with the structure’sthermal envelope and localclimate conditions.” EnergywiseEngineered Energy Analysisprogram uses proprietary softwareto create a detailed energy analysisreport from each building plan.The report accurately projects theannual heating and coolingconsumption, comparative savingsand optimal heating and coolingsystem sizing. This information isused to coordinate the home’ssystems to optimize theperformance of the Bayseal spraypolyurethane foam.Bayseal spray foam quicklyexpands, filling open spaces toprovide a continuous, protectiveair barrier that practicallyeliminates air leakage, the leadingcause of building energy waste.Bayseal foam cures within seconds,forming the foundation of astructurally strong, virtuallyairtight, thermal, sound andcondensation barrier.To ensure Bayseal foam performsup to its full potential, Energywisepreferred contractors install thematerial based on the designspecifications to seal the buildingenvelope. Energywise preferredcontractors are a network of sprayfoam insulation installers thatdemonstrate the highest qualityindustry standards. They are unitedunder the Energywise brand andcommitted to the Bayseal sprayfoam product.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y25

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Product NewsPUTodayProperly engineered foaminsulated homes are inherentlyenergy efficient, allowinghomebuilders to install smallercapacityheating and coolingequipment that saves them, andthe homeowners, money.Energywise structures receive anengineered energy analysis with atwo-year annual heating andcooling cost guarantee, which canbe insured by the builder orbuilding owner.“Energywise is a tool for us toensure we are getting themaximum performance out of ourBayseal insulation product, andthat it’s used correctly within abuilding,” said Charles Valentine,commercial director, spray foaminsulation group, BaySystems. “Theadded benefit for homeowners isthat they have a guarantee that thestructure will perform as energyefficiently as possible, whilecontractors are gaining recognitionin the industry for performing to ahigher standard of excellence.”SprayMaxLiners Revolutionizes Spray in PlaceBedliners with easy to use FastKick GunEquipment, MaxLinerAR MaterialSpray on bedliners just goteasy, safe and inexpensive.The simple to use FastKick Gunsprays like a machine costingtens of thousands of dollarswith no training required.MaxLinerAR is a super tough100 percent solids Polyureathat dries in less then twominutes and contains zeroVOC’s.SprayMaxLiners is pleased tointroduce the fastest, easiest andsafest way to apply Spray inBedliners for the Truck Accessoryshops and Truck Dealerships.The FastKick Gun/Proportionerequipment is the secret. Thisspecial gun uses a simple air motorthat travels forward when thetrigger is pulled. Attached to theair motor are two positivedisplacement rods with roundends that travel at equal speedsthrough the factory filled spray ontruck bedliner material dualcartridge. Should one rod need toslow, the other rod must as wellbeing attached to the same airmotor. This means it is impossibleto not spray polyurea at a perfect1 - 1 ratio.The MaxlinerAR material is prepackaged in disposable dualfactory cartridges. MaxlinerAR is aWith no VOC’s and nocleanup the TruckAccessory shop or TruckDealer does not have toworry about OSHA asmany do using solvents.100% Solids Polyurea that cures onspraying creating the sameprotective thick shield once onlyknown by large franchisecompanies doing Spry onBedliners. As the rods from theFastKick Gun push the A and the Bsides forward they meet in adisposable static mixer. The staticmixer thoroughly mixes the twocomponents and goes through thedisposable air atomizer that createsthe stipple effect associated withspray on bedliners.After spraying a dual cartridge theapplicator simply pushes a buttonin the back of the FastKick Gun,pulls the trigger and the rodsinstantly retract to the bottomposition. The entire cartridge andmixer is then thrown in the trashand the applicator can put anothercartridge in or simply hang theFastKick Gun up, there is no cleanup required.With no VOC’s and no cleanup theTruck Accessory shop or TruckDealer does not have to worry aboutOSHA as many do using solvents.The best part is, the shop is not tiedup. Once the protective wrappingis removed from the truck the sprayon bedliner is done and thecustomer can take immediatepossession driving it home while theapplicator prepares the next truck.Source : http://www.1888pressrelease.com/spraymaxliners-revolutionizes-spray-inplace-bedliners-with-pr-82101.htmlD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y27

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Technical UpdatesPUTodayHIGHLY-FILLED PUR FOR A MORE COMFORTABLE RIDENew spray-on process cuts costs insoundproofingMunich. Duramotive Bayern GmbH,a German automotive componentssupplier, recently began using a PURspraying process developed byKraussMaffei to produce acoustic carpetelements for cars and trucks. Acousticcarpets are effective in reducing noiselevels in the passenger compartment fora quieter, more comfortable drivingexperience. The soundproofing PUR layerhas a high barium sulphate content. It issprayed onto preformed carpet elementsin an open mould using a special spraymixing head. The spray head is mountedon an industrial robot which follows asoftware-controlled spray path.This method has distinct cost and processadvantages compared with other methodsof applying soundproofing layers. Thespray process reduces materialconsumption, it’s extremely flexible, andmould costs are low.Advantages of sprayingThe soundproofing layer is applied in avery precisely and under close control. Thethickness of the layer can be varied,making it possible to spray adjacent areaswith different coating weights. Applicationof the PUR-mix can be restricted to areaswhere soundproofing is required tominimize material consumption andreduce part weight.In addition, the open mould spray processis extremely flexible. The robot can movethe spray mixing head in any direction andat any of a range of speeds, enabling it tocoat parts with varied and complexgeometries. This is of key importance inview of the automotive industry trend togiving car buyers huge individual choicein the features they want in a new car.Another major benefit is that the sprayprocess uses relatively low-cost moulds.The simple moulds with no complexfeatures merely provide a surface onwhich the carpet element is fixed by avacuum.Steady flow ratesThe abrasive nature of barium sulphate is achallenge for the PUR metering system. Tokeep wear to a minimum, the abrasivecomponent, the polyol/barium sulphatemix, is metered using piston metering.KraussMaffei’s Tandem Hybrid meteringmachine feeds the abrasive component bymeans of two pistons moving anticyclicallyto deliver a steady material flow.The highly-filled PUR systems used insoundproofing are fairly difficult to mix. Tosolve this problem, the mixing head isdesigned for ‘T’ mixing. This means that thepolyol component is discharged into themixing chamber through two nozzlesopposite each other. The jet of isocyanatehits the polyol stream at right angles. Thismixing-head design achieves excellentmixing quality and a stable spray jet, evenwhen materials are processed at relativelylow pressure and low temperatures. TheKraussMaffei’s MK 10P-2K-F-PSM spraymixing head is optimal for theproduction of sound-insulation matsusing highly-filled polyurethanesadvantages are twofold: a wider processingwindow and less stress on the material.KraussMaffei is world leaderIn terms of sales, KraussMaffei is worldmarket leader in machines and systemsfor plastics and rubber processing. Withits three divisions – Injection MouldingTechnology, Extrusion Technology andReaction Process Machinery –KraussMaffei is a premium partner for theplastics and rubber processing industriesworldwide.In the 2007/2008 business year (year endingSeptember 30), the KraussMaffei Groupposted sales of more than 1 billion euros.The group markets its products under theKraussMaffei, KraussMaffei Berstorff andNetstal brands. The KraussMaffei brandcovers the whole spectrum of injection andreaction moulding technology, while theKraussMaffei Berstorff brand stands forsuccessful extrusion solutions. The injectionmoulding machines of Netstal, our Swisssubsidiary, meet the highest ofrequirements imposed on processimplementation, parts quality andproduction performance and are mainlyused to make highly sophisticated technicaland thin-walled plastic parts.With over 100 years’ of expertise and knowhowin machinery for plastics and rubberprocessing, KraussMaffei is today a majortechnology and process partner for industry.IMPORTANT ANNOUNCEMENT: PDA Europe Applicator SprayCourse to be rescheduled for 2009Due to logistical reasons, the PDAEurope Applicator Spray Courseplanned for 20-23 October in theNetherlands will be rescheduled to early2009.Please visit our website shortly fordetails on the timing and location ofthe course.Developing the EuropeanPolyurea Market TogetherThe Polyurea Development AssociationEurope (PDA Europe) is the official tradeassociation for the European Polyureaindustry. Registered as an official,international not-for-profit associationunder Belgian law, PDA Europepromotes the highest possible standardsfor polyurea. Leading experts fromacross Europe’s chemical industry makeup the membership base of PDA Europeproviding expert advice on productquality. The association also offers bestpractice information on areas ofenvironmental consideration and safetyand provides an established networkingforum for key industry players to discussthe future of the polyurea market.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y29

PUTodayTechnical ArticleHFCs & Beyond – Energy Efficient and CostEffective HCFC Replacement Technologies forRigid Polyurethane FoamsJim Y. K. LingHoneywell International20 Peabody StreetBuffalo, NY 14210AbstractIn response to the MontrealProtocol on Substances thatDeplete the Ozone Layer (theMontreal Protocol), the productionof foams containing HCFC-141b hasbeen phased out in severalcountries, including the UnitedStates, Japan, and the EU. The useof this blowing agent will be phasedout over the next several years in therest of the world. Honeywell hasdeveloped and commercialized azero ozone depletion potentialblowing agent, Enovate® blowingagent, (HFC-245fa, 1,1,1,3,3-pentafluoropropane) as a nonflammable,liquid replacement forHCFC-141b in polyurethane andpolyisocyanurate foams. Many rigidfoam applications that hadtraditionally used HCFC-141b as theblowing agent, includingappliances, spray foam,discontinuous and continuouspanels, and others, have convertedto Enovate® during this phase-out,and it is anticipated that a similarconversion to Enovate® will occur inother countries around the world asthey complete their transitions.During these conversions, it becameevident that the performance ofEnovate® (foam thermalconductivity, flammability, andphysical properties) equaled orexceeded those of HCFC-141b blownfoams. It was also found thatconverting foam formulations andprocessing equipment from HCFC-141b to Enovate® was relatively easycompared to other options thatwere either flammable or highpressure gases, or both. Althoughit was necessary to address certainphysical property differencesbetween Enovate® and HCFC-141b,primarily the lower boiling point ofEnovate®, the industry successfullyand smoothly converted to thismore environmentally preferredmaterial.This paper will compare theproperties of foams prepared usingHCFC-141b and other blowingagents in several major foamapplications, including appliances,spray foam, and pour in placepanels. The paper will also discusssome of the design considerationsnecessary to convert processingequipment from HCFC-141b toEnovate®.DisclaimerAlthough all statements andinformation contained herein arebelieved to be accurate andreliable, they are presentedwithout guarantee or warranty ofany kind, expressed or implied.Information provided herein doesnot relieve the user from theresponsibility of carrying out itsown tests and experiments, and theuser assumes all risks and liabilityfor use of the information andresults obtained. Statements orsuggestions concerning the use ofmaterials and processes are madewithout representation orwarranty that any such use is freeof patent infringement and are notrecommendations to infringe onany patents. The user should notassume that all toxicity data andsafety measures are indicatedherein or that other measures maynot be required.IntroductionIn response to the MontrealProtocol on Substances thatDeplete the Ozone Layer (theMontreal Protocol), the productionof foams containing HCFC-141b hasbeen phased out in severalcountries, including the UnitedStates, Japan, and the EU. The useof this blowing agent will bephased out over the next severalyears in the rest of the world. Thetotal volume of HCFC using in Indiawill be frozen in 2013 and will bereduced steadily afterwards. HCFCsshould not be treated as theultimate solution but a transitionalsubstance that is subjected tophase-out eventually, during theblowing agent conversion process.In addition, there are significantglobal pressures to accelerate thephase out date of these substances.In order to engage a long term andcontinuous supply of highperformance liquid blowing agentbeyond the phase-out of HCFC-141b, Honeywell has developedand commercialized a zero ozonedepletion potential blowing agent,Enovate® blowing agent, (HFC-245fa, 1,1,1,3,3-pentafluoropropane) as a nonflammable,liquid replacement forHCFC-141b in polyurethane andpolyisocyanurate foams. Many rigidfoam applications that hadtraditionally used HCFC-141b as theblowing agent, includingappliances, spray foam,discontinuous and continuous30 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Technical ArticlePUTodaypanels, and others, havesuccessfully converted to Enovate®from HCFC-141b during this phaseoutprocess. It is anticipated thata similar conversion to Enovate®will occur in other countriesaround the world as they completetheir transitions.Blowing Agent Physical &Flammability PropertiesIn order to fulfill the long termrequirement of the MontrealProtocol, many chemicals arecurrently being used or underconsideration as a zero ozonedepletion blowing agent to replaceHCFCs, especially HCFC-141b. Table1 summarizes the physicalproperties of various blowingagents with zero ozone depletingpotential with CFC-11 and HCFC-141b for comparison. HFC-245faand CFC-11 share many similarphysical properties. Since blowingagent usage level is a function ofits molecular weight, the almostidentical molecular weightbetween HFC-245fa and CFC-11suggests that a similar amount ofblowing agent can be used toachieve similar foam densitywithout major reformulation.The boiling point of HFC-245fa at15.3°C is lower than those of theother blowing agents listed. Thisslightly lower boiling point; andtherefore higher vapour pressureat given temperature, can providesignificant improvement in certainfoam properties, particularly atlower temperatures. A comparisonof vapour pressure of severalblowing agents is shown in Figure1. Unlike HCFC-22 or HFC-134a, theboiling point of HFC-245fa allowsthis material to be handled as a lowboiling liquid at roomtemperature.Similar to CFC-11, HFC-245fa isclassified as a non-flammable liquidblowing agent with neither a flashpoint nor a vapour flame limits inair. Table 2 summarizes theflammabilityproperties ofdifferent blowingagents. HCFC-141bis classified ascombustible withvapour flamelimits but no flashpoint. With noflash point and only narrow vapourflame limits, the hazards related toHCFC-141b are minimal. The energyrequired to ignite a mixture of HCFC-141b and air is approximately20,000mJ compared to 0.1mJ ofcyclopentane, a difference of 5orders of magnitude. Allhydrocarbons exhibit flash pointsand are therefore flammable. Theuse of these materials will generallyrequire major capital investment instorage and processing equipmentmodifications.HFC-245fa, is a zero ozonedepletion liquid fluorocarbonblowing agent with acceptableglobal warmingpotential withrespect to thesum of direct andindirect effect ofa system onglobal warmingnamed TEWI, orTotal EquivalentWarming Impactof that system. IfHFC-245fa isreleased into theatmosphere, it does not breakdown into any long-livedatmospheric products. The directeffect of TEWI is the GWP of theblowing agent itself while theindirect effect is related to totalglobal warming from carbondioxide generated during energyproduction. In fact, refrigeratorscontaining foams blown withHCFC-141b or HFC-245fa consumeabout 10% less energy than anidentical refrigerator insulatedwith cyclopentane blown foam.Therefore, the selection of HFC-245fa to replace HCFC-141b is asound environmental choice. Table3 summarizes the environmentalproperties of different blowingagents. Extensive toxicity testinghas confirmed that HFC-245fa hasD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y31

PUTodayTechnical Articlea very low order of acute toxicity,and the test results are equivalentto or better than those reportedfor HCFC-141b. In addition, HFC-245fa is classified as non-mutagenicand non-teratogen with aWorkplace Environmental ExposureLevel (WEEL) of 300pmm accordingto American Industrial HygieneAssociation (AIHA). Table 4summarizes the toxicity test resultsof HCFC-141b and HFC245fa.Equipment And VesselConversionA critical consideration during theconversion from HCFC-141b to ablowing agent with zero ozonedepleting potential is the cost ofconversion. In other words,throughout the conversion processit is desirable and indeed crucialthat there be little or nomodifications needed to storageand processing equipment. It hasbeen widely reported that in manycases HFC-245fa can be processedusing existing equipment with nomodification. Flammability,vapour pressure, boiling point andmaterial compatibility are the keyproperties of the blowing agentwhich would determine the degreeof equipment modification andcomplexity of conversion. Theinformation below provides aninsight into the recommendedspecifications of storage vessel andfoam processing equipment.Similar to CFC-11, HFC-245fa is anon-flammable blowing agentwith no flash point or vapour flamelimit and has minimum ignitionenergy higher than 100,000mJ. Theminimum ignition energy ofvarious blowing agents at lowerexplosive limit (LEL) with somecommon static electricity sourcesis shown in Figure 2. It is clear thatHFC-245fa demonstrates noflammability risk related to any ofthe listed potential ignitionsources. Generally, no modificationrelated to possible ignition sourceand common static electricity isnecessary for processing anddischargingequipmentwhen usingHFC-245fa. Onthe otherhand, forflammableblowingagents, sucha shydrocarbons,expensivec a p i t a linvestments,ranging from1.5 million to as high as 20 milliondollars, are usually required tomodify or upgrade storage vessel,processing equipment and facilityventilation in order to eliminatepotential ignition sources andimplement stricter safety standardsand handling procedures.A pressure vessel is necessary forstorage of HFC-245fa due to itslower boiling point at 15.3°C andvapour pressure generated in thetank at elevated temperatures to49°C. Table 5 shows the designcriteria for HFC-245fa storage vesselsand the recommended tankpressure rating. For bulk storagevessels, Honeywell engineeringrecommends a pressure vessel thatis made of carbon steel and isdesigned for full vacuum with a 10%safety factor rating in addition tothe vapour pressure of HFC-245fa at49°C. In addition, only inert gas,such as dry nitrogen, should be usedto pressurize or insert into the tank.A pressure relief device, whichincludes a positive sealing valve ora rupture disc and a spring-loadedrelief unit, set to vessel pressurerating is recommended to eliminatethe risk of vessel rupture in case ofexcessive pressure. Satisfactorymaterials for the rupture discinclude Monel, nickel, stainlesssteel and silver, while carbon steelis adequate for the relief valve usedafter rupture disc.32 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Technical ArticlePUTodayHFC-245fa is compatible with mostmetals, plastics, and elastomersused in foam processingequipment. Given that HFC-245fais less aggressive towards plasticsand elastomers than HCFC-141b,PTFE (Telfon) gaskets and seals thatwere originally changed toaccommodate HCFC-141b duringthe CFC-11 conversion should becompatible with HFC-245fa. To bemore specific, full port ball valveswith PTFE seats and seals, carbonsteel body and stainless steel balland stem and stainless steel spiralwound gaskets with PTFE filler arerecommended. Moreover, turbine,side channel multi-stage, orcentrifugal pumps with PTFEmechanical seals which fulfills theANSI 150# class ratings aresuggested for HFC-245fatransportation or delivery. Forpolyol blend with HFC-245fa,individual assessment andevaluation should be performed topredict material compatibility forseals and gaskets of the system,such as day tanks, auxiliary holdingtanks, pump, valves and pump head.The information provided above ismeant for reference and as aguideline only. A manual detailsstep by step bulk storage tank andpolyol blend tank conversions canbe obtained from Honeywell forfurther information. Honeywellprofessionals are available toprovide assistance and consultationfor individuals or manufacturersthroughout the conversion process.Appliance FoamAppliance foams are used asthermal insulation for domesticand commercial refrigerators andfreezers. Thermal insulation valueor lambda value is the single mostimportant criteria for judging thefoam’s performance. In the US andEurope, regulations are in place tomandate and promote energyefficiency of refrigerators. Theseregulations are periodicallyupdated to increase the energyefficiency requirements as newtechnologies, such as theintroduction of HFC-245fa, areintroduced. The Association ofHome Appliance Manufacturers(AHAM) in the US conducted a studyto evaluate the energy efficiencyperformance of several candidateblowing agents in actual useconditions against HCFC-141b withrespect to the testing protocoldeveloped by US Department ofEnergy. In this study, the foamformulation was optimized for thatparticular blowing agent andtypically contained small levels ofwater as co-blowing agent, as istypical for these types offormulations.The energy efficiency ofrefrigerators with various zeroozone depletion potentialblowing agents compared withHCFC-141b as baseline isillustrated in Figure 3. Refrigeratorunit containing cyclopentaneblown foam, carbon dioxide(water) blown foam and HFC-134ablown foam are less satisfactorywith about 10%, 12% and 14%change in energy efficiencyrespectively. In contrast, it is clearthat HFC-245fa offers the mosteffective option as an HCFC-141breplacement with less than 1%difference in energy efficiency. Asenergy efficiency regulations areimplemented and strengthenedglobally, HFC-245fa will become animportant part of the strategy tomeet the requirements of theseregulations. This excellent energyefficiency performance of HFC-245fa has been confirmed not onlyin the test above but also innumerous additional studiesreported in the literature over thepast few years.The thermal conductivity of foamswith various blowing agentscompared against meanapplication temperature is shownin Figure 4. The outstandinglambda values of HFC-245fa blownfoam at low mean temperature isthe main factor contributing to theexcellent energy efficiency ofrefrigerators containing HFC-245fafoam. The low boiling point, lowpolymer solubility and tendency toproduce very fine celled foam arethe main reasons for the excellentperformance of HFC-245fa foam atlow temperature. In addition, thislow polymer solubility and fine cellstructure also contribute to theexcellent thermal insulation valueof HFC-245fa blown foams at highmean temperatures.For appliance foam applications,the total system cost including therelative cost of blowing agent, costof differences in formulation, inplacedensity and use ofappropriate liner material forcorresponding blowing agentsshould be considered instead ofthe “per kilo” cost of blowing agentalone. Although HFC-245fa costssignificantly more than HFC-134a orcyclopentane on a “per kilo” basis,D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y33

PUTodayTechnical Articlethe cost-in-use for HFC-245fa is only4% and 6% higher than HFC-134aand cyclopentane correspondingly.The fact is illustrated in Figure 5with relative cost of foam, liner andplant conversion. This slightlyhigher cost is justified through thecost to avoid processing difficultiesof HFC-134a and to accommodatethe flammability and safetyconcerns associated with the useof hydrocarbons.The cost of HFC-245fa isdramatically less expensive thanusing either HFC-134a orcyclopentane once the cost offulfilling the US Department ofEnergy 2001 Energy Efficiencystandard was included. Theillustration is demonstrated inFigure 6 below. As similar energyregulations and guidelines areemerged and implementedglobally, HFC-245 will emerge asthe blowing agent produces foamwith the best performance, leastcostly and most environmentallyfriendly option for appliances.The dimensions of refrigeratorsand freezers usually followconventional standards. Thebalance between the insulationthickness and effective space in theappliance is therefore crucial.During the phase-out of HCFC-141bin the US and EU, US manufacturerswidely chose HFC-245fa as theHCFC-141b replacement whileEuropean manufacturers preferredusing various isomers of pentane.According to a limited life cycleanalysis (LCA)conducted by RWJConsulting Inc. with theassumption of nodesign modification isperformed to offset theenergy loss in theappliance, HFC-245fanot only provides about12% - 15% higher energyefficiency over the lifecycle of the appliancebut also consumes 13%, or 57kWh/yr, less power when compared tothe pentane blend in a typicalEuropean 358-Liter combi typerefrigerator and freezer. In 2005,the national average carbondioxide equivalent intensity forelectricity production isapproximately 0.91kg of CO2/kWhin India and assuming a domesticmarket of 20 million applianceunits in the country, using HFC-245fa instead of pentane blend inthe appliance sector would lead toa reduction of more than 1 millionmetric tons of CO2 emission fromelectricity generation.Spray FoamThe situation of spray foam ismore unique and challenging withrespect to blowing agentconversion. First, spray foam isproduced on site in anuncontrolled and uncontainedenvironment instead of in acontained manufacturing facility;therefore, the use of flammableblowing agents, such ashydrocarbons are not preferred forsafety reasons. Second, blowingagents with low boiling point, suchas HCFC-22 or HFC-134a are notadequate due to the high resultantvapour pressure and safety concernfor typical containers, such as 16gauge drums. Third, capitalinvestment to modify existing sprayand processing equipment is notcurrently a viable option becausespray foams are marketed in a verycost-competitive environment. Allthese factors have made HFC-245fa,in particular HFC-245fa/CO2(water),technology the most ideal solutionfor spray foam application.Aiming to reduce the vapourpressure on polyol premix duringtransportation and to lower thecost of using HFC-245fa, a Europeanspray foam trial with HFC-245fa andCO2(water) as co-blowing agent wasperformed and evaluated. Theevaluated formulations are listedin Table 6. The resultant polyolblend with HFC245fa/CO2(water)34 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Technical ArticlePUTodaystored in currently-used packagingcontainers demonstrated neitherbulge nor deformation. Inaddition, no excessive pressure wasnoted when the containers wereopened. Storage stability of asystem is critical to both systemhouse and the spray foamcontractor because sprayformulations are usually stored indrums over an extended period oftime before being applied. Nosignificant difference in reactivitywas found even after the blendedsystem had been stored in drumsfor an extended period of time.Free rise density and final densityare compared for the HFC-245fasystem and HCFC-141b system andlisted in Table 7. Foams preparedwith HCFC-141b have a free risedensity equivalent to thoseprepared with HFC-245fa. The finaldensity of HFC-245fa foam was ofa lower density than the HCFC-141bfoam which indicates that less HFC-245fa was lost during sprayingcompared to HCFC-141b. Inaddition, a significantimprovement in yield was noticedin samples with HFC-245fa whenthe density variation between skinand core foam were compared.Dimensional stabilities of thesefoams were evaluated at 70°C and-20°C for 56 days and are listed inTable 8. The HFC-245fa system hasdemonstrated noticeably betterdimensional stability propertiesthan the HCFC-141b systems in boththe hot and cold environmentsafter 28 days. The thermalinsulation values of both HCFC-141b and HFC-245fa foams arecompared in Table 9. The initialthermal insulation value of theHFC-245fa foam and HCFC-141b isequivalent despite the fact that40% fewer moles of fluorocarbonblowing agent were used in theHFC-245fa foam formulation. Theaged k-factor of HCFC-141b is about4% lower than the HFC-245fasystem because fewer moles ofwater were used in the HCFC-141bsystem. Based upon all theseresults, one can conclude that theevaluated formulation hasacceptable vapour pressure,similar reactivity and equivalent orsuperior physical properties whencompared to a commercial HCFC-141b system.Discontinuous Foam PanelFlow and cure profile of theformulation are critical for theefficiency of discontinuous metalpanel manufacturing process andproduct quality. A research trialwas conducted to compare theprocessing performance of ageneric foam system containingD E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y35

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Technical ArticlePUTodayHFC-141b and HFC-245fa. The trialconditions and process parametersare listed in Table 10.The reactivity and density of theHCFC-141b and HFC-245fa foamsystems are compared in Table 11.In addition, the relative ranking ofprocessing characteristics ofdiscontinue panel system arecompared in Table 12.According to the results, foamsprepared with HFC-245fa areequivalent or superior comparedto those prepared with HCFC-141b.The HFC-245fa formulationdemonstrated superior yield permoles of blowing agent used. Thiscoupled with the superior flowperformance of the system couldresult in significant yield(manufacturing cost) improvementduring the panel manufacturingprocess.ConclusionHFC-245fa is a non-flammable, zeroODP blowing agentwhich producesfoams withequivalent or betterphysical propertiesand thermalinsulation valuewhen compared toHCFC-141b. Labstudies and full scalefield trials haveconfirmed that HFC-245fa performs well either by itselfor with water as a co-blowing agentin various polyurethane rigid foamsectors as demonstrated in thispaper. Compared to other blowingagent candidates, the conversionfrom HCFC-141b to HFC-245fa ismuch simpler, more energyefficient and more cost efficient inmany regards.REFERENCES1. D.J. Williams, M.C. Bogdan, P.C. Parker,G.M. Knopeck, “HFC-245fa, the NextGeneration Rigid PU Foam Blowing Agent”Proceeding of PU China 19952 D.J. Williams, R.C Bogdan, P.C. Parker,“HFC-245fa: A Nonflammable LiquidBlowing Agent for Rigid PolyurethaneFoam” Proceeding of UTECH 19963 D.J. Williams, L. Chin, M.C. Bogdan, P.B.Logsdon, “Next Generation Blowing Agentsfor Thermal Insulation Foams” Proceedingof Utech Asia 19994 J. Bowman, D.J. Williams, “HFC-245faFoam Equipment Considerations”Proceeding of Polyurethane Expo 20015 D.J. Williams, “Enovate® 3000 BlowingAgent: A Versatile and Cost EffectiveBlowing Agent Technology for Rigid Foam”Proceeding of Polyurethane Expo 20026 M. Bogdan, “Enovate® 3000 BlowingAgent – A Versatile Blowing Agent forPolyurethane and Polyisocyanurate Foamin the European Construction Industry”Proceeding of RAPRA 20037 R.W. Johnson, “The Effect of BlowingAgent Choice on Energy Use and GlobalWarming Impact of a Refrigerator”International Journal of Refrigeration 2004,V.27 Issue 7, pg 794 - 7998 J.M. Bowman, D.J. Williams, “OneComponent Foam: EU Industry Solutions”Proceeding of Polyurethane Expo 20079 S. Malla, “CO2 Emission from electricitygeneration in seven Asia-Pacific and NorthAmerican countries: A decompositionanalysis” Energy Policy 2008BiographyJim Y.K. LingJim holds a B.A.Sc degree and anM.Eng degree in ChemicalEngineering and Applied Chemistryfrom University of Toronto, Canadaand is a registered ProfessionalEngineer under PEO in the provinceof Ontario, Canada. He worked asa research and developmentscientist for ShawCor Ltd. in thespray applied rigid polyurethanefoam sector for thermal insulationapplications. Jim joined Honeywellin 2007 and is currently a staffscientist in the blowing agenttechnical service and developmentgroup with primary responsibilityfor panel and integral skin foamapplications of fluorocarbonproducts.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y37

PUTodayHealth & SafetyBayer included once again in Carbon Disclosure Leadership IndexBayer is one of the world’s leadingcompanies in climate protection Board of Management member Dr. Plischke welcomes recognition of“the effort we are making through the Bayer Climate Program” Corporate climate strategies of increasing significance to investorsNew York, September 22, 2008 –Bayer has this year once again beenincluded in the Carbon DisclosureLeadership Index, the first global climateprotection index. This was announcedin New York by the Carbon DisclosureProject (CDP) Investor Group. This singlesBayer out as a leading internationalcompany in the field of climateprotection.Bayer is the only European companyfrom the chemical and pharmaceuticalsindustry to be included in the climateindex for the fourth successive year. Theassessment of the world’s 500 largestlisted companies was carried out byindependent experts from the audit firmPricewaterhouseCoopers (PwC). PwCdescribed Bayer as an “exemplary”company in the Leadership Index.“We are very delighted by this renewedcommendation,” says Dr. WolfgangPlischke, who is the member of BayerAG’s Board of Management responsiblefor Innovation, Technology andEnvironment. “It shows that investorsrecognize the efforts we are makingthrough the Bayer Climate Program,which we are continuing to driveforward.”How companies strategically meet thechallenges of climate change plays amajor role in the investment decisionsof CDP investors. According to the CDP’sfigures, 385 international financialservice providers with a managedinvestment volume totaling in excess ofUSD 57 trillion have come together inthis initiative. Last year investmentvolume was USD 41 trillion.“Good corporate governance in respectof climate change disclosure willinevitably reap its rewards. As carbonregulation increases, those companiesthat have implemented climate changerelated strategies are clearly going to bein a far better position to meet thechallenge of higher carbon prices thancompanies that have procrastinated,”comments Paul Dickinson, ChiefExecutive of the Carbon DisclosureProject. “Good disclosure practices aresynonymous with good management.”The ranking assesses each company’sstrategy on climate protection and onaddressing climate change, its targets forreducing emissions of greenhouse gasesand its endeavors in this field. Key factorsinclude the extent to which the companyregards the challenges of climateprotection as an opportunity for itsbusiness and seeks to minimize theclimate change risks resulting from itsoperations. Basis for the evaluation isthe level of transparency in thecompany’s reporting.Since 2004, the CDP has listed the FT500companies with the best climateprotection performance in the CarbonDisclosure Leadership Index. This year,there are 67 such companies.Institutional investors involved in theinitiative base their investment decisionsto a significant degree on thecomposition of the index as wellalongside other financial criteria.Bayer’s Climate Protection Program,which was launched at the end of 2007,brings together a wide variety ofmeasures to further reduce its emissionsof greenhouse gases and develop newsolutions targeted at climate protectionand climate change issues. For example,Bayer and partners are currentlyimplementing a new concept for zeroemission business premises in India.Known as the EcoCommercial Building,the principle can be adapted to differentclimate zones. Moreover, Bayer isworking on the development of plantsthat are resistant to heat, drought andcold and on sustainable use of plantbasedfuels. Further, the Group iscurrently carrying out a speciallydeveloped “Bayer Climate Check” toevaluate potential for a further reductionin emissions of greenhouse gases at itsglobal production facilities.The integrated Bayer Climate Programalso includes action to reducegreenhouse gas emissions fromcompany cars and business air travel.These efforts are supplemented byinitiatives targeted at schools andscientists. Bayer fosters school students’commitment to climate protectionthrough grants to attend climateprotection courses and has establisheda new “Bayer Climate Award”, which willbe conferred for the first time at the endof 2008. This is the first internationalprize for basic climate research.Further information on CDP rankings isavailable on the Internet atwww.cdproject.net.More information on the Bayer ClimateProgram at www.climate.bayer.com38 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Health & SafetyPUTodayFocus on ecofriendly products and processes: BASF at theIndia International Leather Fair in ChennaiFrom formaldehyde-free synthanes to ecofriendly finish productsThe Fashionova concept: 5 x 5 benefits for the leather industry in South AsiaThe complete range of Lugafast® reactive dyes24 November 2008The India International Leather Fair(IILF) will be held in the Trade Centerin Chennai, Tamil Nadu province, India,from January 31st to February 3rd,2009.This year the company is focusing onenvironment-friendly products andprocesses. Highlights are presentationsof the new formaldehyde-free Syntanseries, the new soft polymers, and thenext generation of water-repellentsystems with products such asDensodrin® EP.New, ecofriendly finish products to bepresented at the fair include Lepton®Aquatop TG, a top coat that provides anatural leather touch and a transparentlook.Possibilities for reducing waterconsumption in the beamhouse andwet-end processes will also bepresented.Another key topic is the furtherdevelopment of the Fashionovaconcept, which was specially developedfor the leather industry in South Asia. Itconsists of 25 carefully selectedproducts for elaborating the entirespectrum of traditional and elegantfashion leathers.Also to be presented is the now completecolor range of Lugafast® reactive dyes:Lugafast® Black AN, Brown BB, BrownBC, Red RR, Yellow GG and Blue MB.“With all our products and processes,the focus is on ecofriendliness andeconomy”, says Thomas Sattler,responsible for BASF’s global leatherbusiness. “Our customers, also those inSouth Asia, expect and demandecological products that meet theirindividual requirements. It is gratifyingthat environmental protection andsustainable development are becomingmore and more important. We areaware of our responsibility in thisregard and have positioned ourselvesaccordingly.”A team from different Sout Asiancompetence centers will advisecustomers at the booth and informthem on innovative developments aswell as on the comprehensive range andestablished quality products.About Densodrin® EPThis new development combines 30years of experience with the latestfindings from R&D. The product ischaracterized by level dyeing andreliable application, especially inregions with hard water. It produces adry surface that facilitates finishing. Inenvironmental terms, Densodrin® EPrepresents a significant step forward. Itcan be used on all leather types and isparticularly recommended for shoeuppers, which must give excellentperformance in the Maeser and Ballypenetrometer tests.About Lepton® Aquatop TGThe application of this product in topcoats is a simple, effective way to obtaina transparent high-gloss finish. Theproduct can be readily combined withother products. Particularly glossysurfaces can be obtained by applying ittogether with a casein binder from theLuron® product line. Combining it withLuron® Top makes the finish verytransparent. The good wet rub fastnessvalues can be further improved byadding silicone waxes and crosslinkers.Overall, the product offers an excellentprice-performance ratio. Lepton®Aquatop can be applied to all leathersbut is especially recommended for shoeuppers, upholstery and garment leather.BASF Performance Chemicals – alwaysone idea ahead!The product range of BASF’s LeatherChemicals business unit includeschemicals for all wet-end and finishingprocesses in the leather and furindustries. Not only are our productsmanufactured and marketedworldwide, but we are one of the leadingsuppliers in these fields. Furtherinformation on our products may befound at: www.basf.com/leather.About BASFBASF is the world’s leading chemicalcompany: The Chemical Company. Itsportfolio ranges from oil and gas tochemicals, plastics, performanceproducts, agricultural products and finechemicals. As a reliable partner BASF helpsits customers in virtually all industries tobe more successful. With its high-valueproducts and intelligent solutions, BASFplays an important role in finding answersto global challenges such as climateprotection, energy efficiency, nutrition andmobility. BASF has more than 95,000employees and posted sales of almost•58 billion in 2007. Further informationon BASF is available on the Internet atwww.basf.com.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y39

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Market Trends UpdatesPUTodayStatistical Market Forecast forPolyurethanes in IndiaDefinition PolyurethanesPolyurethanes (PU) have a number of unique properties and areextremely versatile. The four basic types of polyurethanes are: Polyether/TDI, Polyester/TDI, Polyether/MDI, Polyester/MDI. This report containsa consolidated statistical analysis of polyurethanes.Market Overview PolyurethanesIndiaIndia2005 2006 2007 2008 2009 2010 2011 2012US$ billion 2.5 2.8 3.1 3.4 3.5 3.7 4.0 4.2Index, 2005=100 100 114 126 138 141 150 160 170South Asia Market SharePolyurethanesThe pie chart below shows India’s share ofthe South Asian market.India2007Market OverviewPolyurethanesThe market forecast is shown in the graphic below.IndiaComparative World ForecastGrowth IndexPolyurethanesIndiaThe Indian market forecast is compared to the world forecastin the index below.Comparative EuropeanForecast Growth IndexIndiaPolyurethanesThe Indian market forecast is compared to the South Asianforecast in the index below.World Market SharePolyurethanesIndia2007The pie chart below shows India’s share ofthe world market.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y41

PUTodayMarket Trends UpdatesImportant Notes from thePublisherInformation in this report isresearched from a number ofsources including nationalstatistical agencies, transnational/international bodies and tradeassociations. Depending on thecountry and product, all availablepublished data is usually one ortwo full years behind time. Wherewe have no data, GobiInternational makes estimatesbased on information available tous. Forecasts have been made usinga number of techniques, of whichregression is the most common. Wehave forecast individually for eachcountry. Clients are advised that thehistoric trend is not always anindicator of current developments.All values in this report arepresented in US Dollars. Forcountries other than the USA, thetrends in market values thereforealso contain an element of thefluctuation in exchange ratesbetween the local currency and theUS Dollar.Whilst we use our best efforts inthe preparation of the materialsfor inclusion in this report, we donot assume, and hereby disclaimany liability to any party for loss ordamage cause through errors oromissions in the publicationwhether these errors or omissionresult from accident, negligence orany other cause.Related Product ReportsGobi International publish severalthousand reports on world marketsfor commodities, manufacturedand industrial products. A full listof reports in available on the GobiInternational website(www.gobi.co.uk) and on partnerwebsites. Why not check if yourmarket is covered?A “World Statistical MarketForecast” is available for all thesectors we cover. This reportcontains a Consolidated marketoverview. Individual countryreports are available for thefollowing countries:Argentina Hungary RussiaAustralia India Saudi ArabiaAustria Indonesia SlovakiaBangladesh Iran South AfricaBelgium Ireland South KoreaBrazil Israel SpainCanada Italy SwedenChina Japan SwitzerlandColombia Mexico TaiwainCzech Republic Netherlands ThailandDenmark New Zealand TurkeyEgypt Norway UkraineFinland Pakistan United KingdomFrance Philippines United StatesGermanyPolandGreecePortugalInterim report for the third quarter of 2008:Bayer optimistic about future business trendSales rise by 2.0 percent to EUR 7,948 million (Q3 2007: EUR7,793 million)HealthCare and CropScience improve earning powerMaterialScience earnings significantly lowerGroup EBITDA before special items down 4.2 percent to EUR1,493 million (Q3 2007: EUR 1,559 million)Group EBIT before special items down 6.5 percent to EUR891 million (Q3 2007: EUR 953 million)Full-year guidance for 2008 confirmed / Continued earningsgrowth predicted for 200942 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Market Trends UpdatesPUTodayLeverkusen, October 29, 2008– Following a strongperformance in the third quarter,the Bayer Group confirms its targetsfor 2008. “Despite the difficultenvironment we expect in thefourth quarter, we are confirmingour guidance for 2008 as a whole,”Management Board ChairmanWerner Wenning stressed during aconference call on Wednesday. “Weare also confident about the futuredevelopment of the business andaim to grow earnings again nextyear,” he added. The companycontinued on its path of growthafter a very successful first half,increasing sales in the third quarterby 2.0 percent to EUR 7,948 million(Q3 2007: EUR 7,793 million).Business expanded by a gratifying5.1 percent on a currency- andportfolio-adjusted basis, Wenningexplained. While sales were up inHealthCare and particularlyCropScience, business atMaterialScience held steady yearon year in a difficult marketenvironment.Earnings were diminished by anincrease of some EUR 230 millionin energy and raw material costsat MaterialScience and by negativeexchange rate effects amountingto about EUR 110 million. Eventhe improved earning power ofHealthCare and CropScience didnot suffice to completely offsetthese factors. Group earningsbefore interest, taxes,depreciation and amortization(EBITDA), before special items,declined by EUR 66 million, or 4.2percent, to EUR 1,493 million (Q32007: EUR 1,559 million). The - 2/8 - underlying operating result(EBIT) moved 6.5 percent lower, toEUR 891 million (Q3 2007: EUR 953million).Solid growth at BayerHealthCareSales of Bayer HealthCare rose by3.3 percent in the third quarter, toEUR 3,802 million (Q3 2007: EUR3,680 million). The currency- andportfolio-adjusted increase was 6.1percent. Both segments –Pharmaceuticals and ConsumerCare – contributed to thisimprovement.Sales of the Pharmaceuticalssegment expanded by 2.6 percent(currency- and portfolio-adjusted:5.9 percent) to EUR 2,638 million.“A notable factor was theperformance of the YAZ ® family oforal contraceptives, sales of whichrose by 15.1 percent after adjustingfor shifts in exchange rates,” saidWenning. “Business with the YAZ ®product family expanded in theUnited States too, despite the factthat a generic version of Yasmin ®has been on the market there sinceJuly.” Very pleasing growth was alsoachieved by the cancer drugNexavar ® , sales of which climbed bya currency-adjusted (Fx adj.) 62.9percent. Sales of the multiplesclerosis treatment Betaferon ® /Betaseron ® gained 15.2 percent (Fxadj.), while business with thehemophilia medicine Kogenate ®expanded by 14.8 percent (Fx adj.).Wenning described the Europeanregistration of the newantithrombotic drug Xarelto ® at thebeginning of October as a keybreakthrough. The orallyadministered drug can now beused for prophylaxis of venousthromboembolism followingelective hip or knee replacementsurgery in adult patients. Clinicalstudies in further indications arealready at advanced stages. “Webelieve this innovative drug has thepotential to achieve peak annualsales of more than EUR 2 billion inthe future,” Wenning commented.Sales of the Consumer Healthsegment increased by 4.9 percent(currency- and portfolio-adjusted:6.7 percent) to EUR 1,164 million.All divisions contributed to thisincrease. In the non-prescriptionmedicines business (Consumer Care),the Bepanthen ® /Bepanthol ® productline performed particularly wellwith sales increasing by 21.4 percent(Fx adj.). Sales of the antifungalmedication Canesten ® advanced by11.4 percent (Fx adj.). In theDiabetes Care Division, sales of theblood glucose measurement systemsContour ® (Fx adj. +19.1 percent) andBreeze ® (Fx adj. +37.8 percent)improved significantly, whilebusiness with the older Elite ® systemsmoved back by 28.7 percent (Fxadj.). The Animal Health Divisionbenefited from the particularlystrong performance of the fleacontrol product Advantage ® (Fx adj.+19.0 percent).EBITDA before special items of theHealthCare subgroup rose by 6.8percent to EUR 1,018 million (Q32007: EUR 953 million). This increasewas mostly attributable to thegratifying expansion of business andthe synergies realized from theintegration of Schering, Berlin,Germany. Earnings were diminishedby negative currency effects andconsiderably higher marketing costsfor the expansion of activities inemerging markets and theintroduction of new products.Bayer CropScience raises salesand earnings in all businessunits“We continue to be pleased withthe performance of CropScience.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y43

PUTodayMarket Trends UpdatesThis subgroup expanded sales in allbusiness units in what remained apositive market environment,”Wenning remarked. Sales movedahead by 7.9 percent (currency- andportfolio-adjusted: 14.0 percent) toEUR 1,248 million (Q3 2007: EUR1,157 million).Business in the Crop Protectionsegment expanded by 8.3 percent (Fxadj. +14.7 percent) to EUR 1,067million. Especially good gains wererecorded for seed treatmentproducts, insecticides and fungicides.The Latin America/Africa/Middle Eastregion saw particularly stronggrowth, with sales advancing by 29.8percent (Fx adj.).Sales of the Environmental Science,BioScience segment expanded by5.2 percent (currency- andportfolio-adjusted: 10.5 percent) toEUR 181 million. TheEnvironmental Science businessunit grew sales by 6.7 percent (Fxadj.). In Europe, sales of productsfor professional users andconsumers were well ahead of theprior-year period. Sales of theBioScience business unit climbedby 21.2 percent after adjusting forcurrency and portfolio effects. Herethe vegetable seed businessdeveloped particularly well.EBITDA before special items atBayer CropScience grew by 24.0percent in the third quarter, toEUR 207 million (Q3 2007: EUR 167million), due especially to highervolumes and selling price increasesfor Crop Protection products.Bayer MaterialScienceweighed down by rawmaterial and energy costsSales of Bayer MaterialSciencecame in at EUR 2,549 million in thethird quarter, down 2.9 percentfrom the prior-year figure of EUR2,625 million. Adjusted for portfolioand currency effects, businessremained at the previous year’slevel. Here the decline in volumeswas almost completely offset byhigher selling prices. Business inNorth America was impacted byHurricane Ike.Sales in the Systems segment heldsteady year on year at EUR 1,850million. In the foam raw materialsbusiness (polyurethanes), there wasa gratifying improvement in sales ofTDI (toluene diisocyanate), whilesales of MDI (diphenylmethanediisocyanate) receded slightly. Inregard to the business with rawmaterials for coatings, adhesives andspecialties, sales gains in Asia-Pacificdid not fully compensate for lowersales in the European market.Sales in the Materials segmentdeclined by 8.9 percent (currencyandportfolio-adjusted: minus 2.3percent) to EUR 699 million. Whilesales of polycarbonates fell by 2.8percent after adjusting for currencyand portfolio effects, theThermoplastic Polyurethanesbusiness unit saw business expandby an adjusted 2.9 percent.Compared to the prior-year period,earnings of MaterialScience weregreatly hampered by raw materialand energy price increases totalingsome EUR 230 million. “Selling priceincreases and cost savings from ourrestructuring program only partlyoffset these effects,” explainedWenning. EBITDA of the subgroupbefore special items fell by EUR 166million to EUR 255 million.Core earnings per shareslightly improvedThe Bayer Group took net specialcharges of EUR 207 million in thethird quarter (Q3 2007: EUR 276million). After special items, EBITedged ahead by 1.0 percent to EUR684 million (Q3 2007: EUR 677million). Net income came in atEUR 277 million. The prior-yearfigure of EUR 1,175 millioncontained EUR 911 million in onetimenon-cash tax income arisingin connection with the corporatetax reform in Germany. Coreearnings per share increased to EUR0.85 (Q3 2007: EUR 0.81).Gross cash flow amounted to EUR1,171 million, up 0.5 percent fromthe third quarter of 2007. Due to asmaller decline in working capitalthan in the prior-year quarter, netcash flow was down by 24.0 percentto EUR 1,234 million. Net debt wasEUR 13,687 million on September30, an increase of EUR 383 millioncompared to the end of June. Thisincrease was due, among otherfactors, to changes in the rates formajor currencies against the euro– which had an effect of EUR 0.5billion – and to acquisitions, whichhad a EUR 0.4 billion effect.Performance furtherimproved in the first ninemonthsThe Bayer Group continued toimprove its operating performancein the first three quarters of 2008.Sales from continuing operationsadvanced by 2.7 percent to EUR24,995 million (9M 2007: EUR24,345 million). After adjusting forcurrency and portfolio effects, theincrease came to 7.2 percent.EBITDA before special itemsimproved by 4.1 percent to EUR5,574 million (9M 2007: EUR 5,355million), while EBIT before special44 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Market Trends UpdatesPUTodayitems rose by 3.5 percent to EUR3,636 million (9M 2007: EUR 3,513million). Group net income for thefirst nine months amounted to EUR1,613 million. The prior-year figureof EUR 4,644 million containedproceeds from the divestitures ofthe Diagnostics business, H.C.Starck and Wolff Walsrode, as wellas a one-time non-cash tax gain.Core earnings per share improvedto EUR 3.46 (9M 2007: EUR 3.09).Secure perspectives for BayeremployeesWenning expressed his optimismabout the company’s futureperspectives. He believes thatalthough it is difficult to assess howthe financial crisis will play out, itwill not have a direct impact onthe company’s financial status. “Inparticular, the Schering acquisitionwas soundly financed right fromthe start. As a result, we currentlyhave no need for refinancing – anddebt that matures in the comingyears is intended to be paid downout of operating cash flow,” saidthe Management Board Chairman.“However, we are of course affectedby the economic environment as awhole.” In his opinion there is noquestion that the profoundturbulence on the internationalfinancial markets is increasinglyrestraining global economicdevelopment and harborssubstantial additional risks for thereal economy.Wenning pointed out that the crisistends to cause anxiety in theworkforce: “So it’s precisely attimes like these that we must havespecial consideration for ouremployees.“ He stressed that thecompany will do all it can toaddress understandable concernsabout the employees’ personal andfinancial situation, remarking thatjob security is particularlyimportant: “For years Bayer hasconcluded agreements with theWorks Council that rule outdismissals for operational reasonsin Germany – currently until theend of 2009,” Wenning stressed. Thecompany also intends that salariesshould continue to develop as hasbeen customary in the past. Theemployees’ company pension rightsare also safe: “Speculative behavioris not part of the investmentstrategy of our pension funds.”Outlook for 2008 confirmed“Despite the difficult economicconditions expected in the fourthquarter, we confirm our full-yearguidance for 2008,” Wenning said.The company continues to targetover 5 percent currency- andportfolio-adjusted growth in Groupsales, which would mean sales ofapproximately EUR 33 billion.Bayer plans to further improveEBITDA before special items andthe underlying EBITDA margincompared to 2007.“We remain confident about theperformance of our HealthCarebusiness. We continue to expect alldivisions to grow with or above themarket after adjusting for currencychanges,” said Wenning. Bayer aimsto improve the EBITDA marginbefore special items in thissubgroup toward 27 percent.The company expects the generallypositive market environment for itsCropScience business to continuein the fourth quarter. Against thisbackground, Bayer continues tobelieve that it can increase sales bywell over 10 percent on a currencyandportfolio-adjusted basis andimprove the EBITDA margin beforespecial items to about 25 percent.Bayer anticipates a furtherweakening of the economicenvironment for its MaterialSciencebusiness in the fourth quarter of2008, with this subgroup’s earningscontinuing to decline compared tothe third quarter. The subgroup’sEBITDA before special items for thefull year 2008 is therefore expectedto come in well below the 2007figure. However, it is anticipatedthat MaterialScience will againachieve a good, value-creatingearnings level.Wenning: “We remain ontrack”The Management Board Chairmanstressed that Bayer remains ontrack despite the financial crisisand the weakening economy.“Some 70 percent of the business– namely health care andagriculture – is less dependent oncyclical fluctuations, and this ispaying off.” Bayer thereforeconfirms its goal for 2009 of anunderlying EBITDA margin ofaround 28 percent for HealthCareand 25 percent for CropScience,Wenning said. However, underlyingEBITDA at MaterialScience isexpected to decline. Summing up,Wenning said: “For the Bayer Groupas a whole, we plan a furtherimprovement in EBITDA beforespecial items in the coming year.”Bayer intends to narrow its forecastfor 2009 at the Spring FinancialNews Conference on March 3.Note to editors:The tables below contain the key datafor the Bayer Group and itssubgroups for the 3rd quarter andfirst nine months of 2008.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y45

PUTodayMarket Trends UpdatesAlso available for download on theInternet at www.press.bayer.comare:The complete interim report as ofSeptember 30, 2008 A transcript of the address byWerner Wenning and theaccompanying slides (from 9:00a.m. CET)Supplementary material atwww.live.bayer.com:Live webcast of the conference call(starting at approximately 10:00a.m. CET)A recording of the conference call(starting at approximately 2:00p.m. CET)TV editors can download or orderupdated film footage aboutBayer free of charge atwww.bayer-tv.com.EBITDA = EBIT plus amortization of intangible assets and depreciation ofproperty, plant and equipment. EBITDA, EBITDA before special items and EBITDAmargin are not defined in the International Financial Reporting Standards andshould therefore be regarded only as supplementary information. The companyconsiders underlying EBITDA to be a more suitable indicator of operatingperformance since it is not affected by depreciation, amortization, write-downs/write-backs or special items. The company also believes that this indicator givesreaders a clearer picture of the results of operations and ensures greatercomparability of data over time. The underlying EBITDA margin is calculated bydividing underlying EBITDA by sales.BASF reduces production worldwide Massive decline in demand in key industries Previous year’s earnings level will not be achievedLudwigshafen, Germany –November 19, 2008 – BASF istaking measures to avoid thecreation of overcapacities as aresult of a massive decline indemand. The company is46 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

Market Trends UpdatesPUTodaytemporarily shutting down around80 plants worldwide. In addition,BASF is reducing production atapproximately 100 plants. This wasalready announced for polystyreneand caprolactam. Scheduledmaintenance work is beingbrought forward.“We already drew attention to thedifficult economic situation at theend of October. Since then,customer demand in key marketshas declined significantly,” said Dr.Jürgen Hambrecht, Chairman ofthe Board of Executive Directors ofBASF SE. “In particular, customersin the automotive industry havecanceled orders at short notice.”In addition, sales volumes arebeing negatively impacted byincreased reduction of inventoryby customers and a lack of creditin customer industries.“In 2008, BASF will therefore notachieve the previous year’sexcellent EBIT before special items.How the coming year will developis difficult to foresee. BASF ispreparing for tough times,” saidHambrecht.Worldwide, approximately 20,000employees will be affected by theproduction cuts. Flexible workingtime arrangements will be usedwherever possible.At the company’s main site inLudwigshafen, Germany, BASF SEhas signed an agreement with theworks council under which themeasures will be implementedthrough the flexible use of workingtime arrangements such asovertime and vacation. Accordingto current plans, the measures areexpected to affect approximatelyBASF is the world’sleading chemicalcompany: The ChemicalCompany. Its portfolioranges from oil and gasto chemicals, plastics,performance products,agricultural products andfine chemicals. As areliable partner BASFhelps its customers invirtually all industries tobe more successful.5,000 employees in Ludwigshafen.“We are responding flexibly tomarket developments and areacting quickly,” explainedHambrecht. “BASF will now focuseven more closely on cost andbudget discipline, and will useopportunities arising from thecrisis. We will also proceed swiftlywith the planned acquisition andintegration of Ciba to furtheroptimize our business.”The adjustments are primarilybeing carried out in units thatsupply the automotive,construction and textile industries.Value chains affected includeammonia, styrene and polyamide,which manufacture precursors forengineering plastics, coatings andfibers. The shutdowns will becoordinated throughout BASF’sglobal production Verbund andwill involve all six Verbund sites inEurope, Asia and North America,as well as other sites.Implementation of most of themeasures has already started;reduced capacities are expected tolast until January 2009 forindividual plants. Should theperiod of weak demand continueand if all other flexible workingtime models have been exhausted,the company cannot rule out theneed for short-time working atindividual sites worldwide.BASF will continue to follow marketdevelopments very closely and willadjust production planningaccordingly. “We are realistic, butwe are nevertheless confidentwhen we look to the future,” saidHambrecht. “We have made BASFmore resilient in the past years. Thestrength of our better balancedportfolio makes itself apparent inthe current difficult situation. Weare solidly financed, and we havethe best team on board to navigatethe route ahead successfully.”About BASFBASF is the world’s leadingchemical company: The ChemicalCompany. Its portfolio ranges fromoil and gas to chemicals, plastics,performance products, agriculturalproducts and fine chemicals. As areliable partner BASF helps itscustomers in virtually all industriesto be more successful. With itshigh-value products and intelligentsolutions, BASF plays an importantrole in finding answers to globalchallenges such as climateprotection, energy efficiency,nutrition and mobility. BASF hasmore than 95,000 employees andposted sales of almost •58 billionin 2007. BASF shares are traded onthe stock exchanges in Frankfurt(BAS), London (BFA) and Zurich(AN). Further information on BASFis available on the Internet atwww.basf.com.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y47

PUTodayPreviews & ReportsSecretary General’s Report on IPUA ActivitiesSeptember – December 2008During this quarter the activitiesof the Association were:-1. Annual General BodyMeeting:The AGM was held at Delhi on 22 ndOctober 2008. The resolutionspassed were:i) Appointment of the Chairman,Vice Chairmen, Treasurer andSecretary General was confirmedtill the next AGM.ii) The audited Balance Sheet andother Accounts were approved andpassed.iii) Members felt that we shouldstep up our activities andaccordingly it was decided to meetmore often.iv) Take up common matters of theIndustry with the Governments(Central and State)v) Conduct specific trainingprogrammes in West and Northzones.2. Slab stock FoamerMeetings:Were held in Delhi, Mumbai andChennai to review the currentsituation and draw up an actionplan for development of thissector. It is proposed to have ameeting in Calcutta and collatethe information and build up aconcrete action plan for growthof this sector. Members’cooperation and interest deeplyappreciated.3. Your Association hasstarted interaction with:The American Chemistry Council,Europur, Korea Pu Society, JapanPu Association, Chinese PuAssociation, Polyurethane FoamAssociation USA, ISOPA and othersin an effort to bring the latestdevelopments to your doorstep.4. Our Chairman Mr RahulGautam has been awarded:The prestigious NASSCOME awardfor IT usage at Mumbai on the 26 thNovember.5. A small poem to roundthis report offWe also wish you a Very Happy and Prosperous New Year 2009PU HOUSE NO 44Welcome to PU HOUSE NO 44It’s got a Pu Roof and evena Pu floorWalls are PUF insulated andthere is Pu doorInside is the Puf fridge to keepthings freshA Puf insulated jacket to keepyour body flushA Puf mattress helps you get youreight hoursA Puf pillow soothes your neckand nervesA Pu seat keeps you comfy as yougo to your workplaceCar, Cab or Bus – regardlesspotholes – Pu keeps youfeeling greatAn ergonomic chair with Pufkeeps you fine in the work spotsAll in all Puf ensures that youcome out topsWhatever you do, whereveryou go Pu is thereTrying to assist you and makethings fair.48 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

People’s UpdatePUTodayChange of Guard at BASF IndiaMr. Udo Schilling – the maninstrumental in starting the BASFSystem House in India, hascompleted his successful stint inIndia, and has returned to theparent company - Elastogran,Germany. He was a thoroughprofessional - down to earth,precise and keenly interested in,and committed to the Pu industry.Right from the domain ofproduction to safety, environment- his contributions to the IPUA isimmeasurable. During his threeyear tenure in India he has made anumber of close friends who wishhim and his family all the very bestin the days ahead.ChandrakantN a y a k ,currentlyPolyurethanesSystemsH o u s eDirector forIndia, hasbeen named Director - Sales &Marketing for Dow Automotive forSouth Asia region. In this role, hewill be responsible for acceleratingprofitable growth and forpositioning Dow Automotive as asolution oriented industry partner,helping our customers solve theirmost pressing challenges.Chandrakant joined Dow in 1995 asPolyolefins Business Manager inIndia. Since then he has movedthrough a number of criticalassignments in MarketDevelopment, Sales Management,Business Development and runningthe business. He has played a keyrole in accelerating Dow’s businessgrowth in Indian subcontinent andespecially in Polyurethane Businesswith new business models such asBulk Tank for Polyol and Systemsmodel for Appliance business thathave changed the face of IndianPolyurethane business. Last threeyears he has been leading Dow’saggressive growth in PolyurethaneSystems business in India alongwith setting up of local SystemsHouse at Navi Mumbai.Chandrakant is a chemical engineerfrom UDCT with specialization inPolymers and also holds Masters inMarketing Management Degreefrom Mumbai University.MaheshGopalasamudramNamed Director,PolyurethaneSystems House, IndiaM a h e s hGopalasamudram,currentlyPolyurethane(PU) Coatings,Adhesive,Sealants andElastomers(CASE) areamarketingmanager, hasbeen assignedadditionalresponsibility as Director forPolyurethanes System House, India.In this role, he will be responsiblefor leading all the commercialactivities, implementing businessstrategy and expanding Dow’sparticipation across the segmentsof the PU Systems business in Indiaand the subcontinent.Mahesh joined Dow in 1999 as aTechnical Sales Manager in the PUSystem House in Mumbai. From2003 to 2005, he handled businessdevelopment responsibilities inflexible specialties and businessdevelopment efforts for DowAutomotive in the Southeast Asiaregion. Over the last 2 years Maheshwas also responsible for drivingmarketing initiatives for PU-CASE inIndia, Middle east and Africa.Mahesh holds a PhD. in chemistryfrom the Madras University in India.Chandrakant Nayak has taken overresponsibility as Director, DowAutomotive for India.Mr. MandarJoshi, has beenappointed asG e n e r a lManager, BASFPolyurethanesIndia Ltd (BPIL)effective 1stDecember 2009. He took over thepost from Mr. Udo Schilling.Mr. Joshi is a Chemical Engineerfrom IIT, Mumbai and has donepost graduation in Marketing fromJamnalal Bajaj Institute ofManagement; Mumbai.He is associated with BASF since1996 and was posted in Germanyfor 4 years for some of his earlierassignments.D E C E M B E R 2008P O L Y U R E T H A N E S T O D A Y49

PUTodayEvents & TrendsEvents CalendarINTERNATIONALJanuary 11-14, 2009Sprayfoam 2009Austin, TX.www.sprayfoam.orgMarch 4-5, 2009High Performance Fillers for PolymerComposites 2009 Barcelona, SpainMarch 31-April 02, 2009UTech Europe 2009MECC, Maastricht, The Netherlands Contact CrainCommunications Ltd.Tel. +44 20 7457 1400Fax. +44 20 7457 1440email: pmitchell@crain.comconf contact UTECH-2009@crain.comMarch 31-April 2, 2009European Coatings Show 2009March 31-April 1, 2009Elmia Materials and Functions 2009Jönköping, SwedenApril 7-9, 2009ExpoCoating 2009 - International Exhibition& ConferenceMoscow, RussiaApril 15-16, 2009Paint and Varnish Materials, Raw Materialsand EquipmentKiev, UkraineOctober 11-13, 2010Polyurethanes 2010 Technical Conference,in partnership with UTECH North AmericaHilton Americas Hotel and the HoustonConvention Center, Houston, TexasNATIONALFebruary 4-5, 2009Plastindia 2009 - 7 th International PlasticsExhibition & ConferenceNew Delhi, IndiaFebruary 6-8, 2009India International CoatingsShow 2009Chennai, IndiaHIGH PRESSUREFOAMING MACHINEFOR SALEMODEL : CANNON - A-40(COMPACT) FCRATIO : 1:1April 19-21, 2009PMA Annual Meeting, 2009Hilton DeSoto Savannah, GeorgiaApril 21-23, 2009REACH Europe 2009Antwerp, BelgiumMay 5-7, 2009Polyurethanes 2009 Technical ConferenceFort Washington, MD (Wash., DC Area)OUTPUTCONTACTE-MAIL: 40 KGS PER MINUTE: R. KARTHIKEYAN098652 30816: primepolyseats@yahoo.co.in50 P O L Y U R E T H A N E S T O D A YD E C E M B E R 2008

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PUTodayFOR 52PRIVATE P O L YCIRCULATION U R E T H A N EONLY. S T OEdited D A Y by Ms Medha Bhuta Published by K. Ramamurthy for Indian D EPolyurethane C E M B E R 2008 AssociationPrinted by : citiprints 94449 42151 • e-mail : citiprints@gmail.com