Fine Chemicals reported sales of €478m for the first three months of the year, compared to €488 for the comparative period of 2006. EBIT before special items was €32m, up from €11m, and EBITDA €55m, up from €40m.

However this growth is consistent with BASF 's recent quarters in that it was driven primarily by personal care - and in particular the acquired Engelhard Corp business, consisting of effect pigments and personal care materials.

Recent financial reports have said that weak sales of lysine and carotenoids, as well as a weaker custom synthesis business have had an impact on results - but BASF has been taking measures to address this situation.

However, as a result of persistent pressure on margins for functional polymers, earnings in the performance products segment were lower than in the first quarter of 2006.

Likewise the plastics division sales declined slightly with the polyurethanes segment not matching from the comparable period in 2006.

At the beginning of this month the group announced that it will be ceasing production of lysine at its plant in Gunsan, South Korea.

The move comes despite BASF having undertaken a cost reduction programme over the past three years. But rising raw material costs, overcapacities and high dependencies on export have at last led to the conclusion that the business is no longer sustainable.

The closure also casts uncertainty over the future of its vitamin B2, which is also produced at the site.

Other restructuring measures include the October announcement that the animal and human nutrition businesses under one marketing roof.

In Agricultural Products, which sits alongside Fine Chemicals in the same unit, BASF reported a slight decline in sales from €928m in Q1 2006 to €897m this year.

The slip is attributed to divestiture of large parts of the Micro Flo generics business, and global business with the active ingredients terbufos.

But indications of market recovery in Brazil were a positive influence, with an increase in sales volumes - particularly for sugarcane products. Soybean also provided a boost, with gradual market recovery.

BASF chairman Dr Juergen Hambrecht said: "The good start in the first quarter confirms our positive outlook for 2007. We expect significantly higher sales based on the acquisition made in 2006 and organic growth."