26 February 2009 07:30 [Source: ICIS news]
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SINGAPORE (ICIS news)--German chemical giant BASF will cut at least 1,500 jobs worldwide after reporting a 10% year-on-year decline in 2008 operating profits, expecting business conditions to worsen this year, the company said on Thursday.
BASF said its operating profits were just under €6.9 billion ($5.4bn) last year compared to €7.6bn in 2007 due to a sharp slump in demand for chemicals, although higher prices helped overall sales to rise 8% to €62.3bn.
The company expects weaker earnings this year due to a decline in sales from 2008 levels. “2009 will be a year of unprecedented challenges,” BASF chairman Jurgen Hambrecht said.
“In order to maintain the company’s long-term competitiveness, BASF is accelerating its ongoing efficiency and restructuring programs, and will close less profitable plants and also sites throughout the BASF Group,” the company said in a statement.
It said the restructuring program would apply to coatings sites in the ?xml:namespace>
“Normally, such plants would be replaced by new capital expenditures. Now, BASF is closing them faster than originally planned,” the company said.
Hambrecht said demand for chemical products has not picked up since the start of 2009 after a dramatic drop in BASF’s global business in the fourth quarter of 2008.
“On the contrary, the situation in our sales markets is worsening, and inventory levels in the value chains are still too high. As a result, the chemical industry is continuing to shrink,” he said.
($1 = €0.79)
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