The ratings on Germany-based chemicals group BASF AG reflect its broadly diversified portfolio of commodity and specialty products, its leading market positions in the global chemicals industry, the increasing importance of its nonchemical activities, and a strong financial profile. A number of rating concerns constrain this very strong profile, however, including high exposure to petrochemical feedstock price volatility, cyclical swings in the chemicals, agrochemicals, and crude oil markets, and a continuing policy to buy back shares. With annual sales of €37.5 billion in 2004, BASF encompasses five business segments: chemicals, plastics, performance products, agricultural products and nutrition, and oil and gas. The group's size and diversity enable efficient portfolio management, which is an important source of strategic flexibility. BASF intends
