BASF will shrink in 2009, only agrochems to grow - CEO

26 February 2009 12:50  [Source: ICIS news]

By Nigel Davis

LUDWIGSHAFEN, Germany (ICIS news)--BASF expects only its agrochemicals business to grow in 2009 as it faces a year of unprecedented challenges, its CEO Jurgen Hambrecht said on Thursday.

“Crop protection is the only sector that will grow at all this year,” he said as the company reported a €313m ($398m) loss for the fourth quarter and a bleak outlook for the full year.

“Despite the acquisitions of Ciba and Revus Energy we expect a decline in sales compared with 2008 and an even greater decline in income from operations which will be negatively impacted by integration costs. We nevertheless aim to at least earn our cost of capital and keep our dividend stable. These goals are extremely ambitious in the current economic climate,” he added.

“We really have to face up to reality,” Hambrecht said at the group’s annual press conference. “BASF will shrink.”

Industry data suggest the North American market for chemicals (excluding pharmaceuticals) would contract by 5% in 2009 with Europe down 5% also.

Demand for BASF`s products had not picked up since the start of 2009 and the sales situation in some markets was worsening, the CEO added. “A turnaround or growth is something I can`t see yet,” he said.

BASF lost €393m at the operating level in the fourth quarter in North America and €337m in the Asia Pacific region.

Profits for Europe were down 19% at €967m but buoyed by oil and gas profits and relatively high quarterly contract prices for some chemicals.

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By: Nigel Davis
+44 20 8652 3214

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