BASF to sell Ulsan SM plant to SK Energy, mulls capacity cuts

03 August 2009 11:19  [Source: ICIS news]

LONDON (ICISI news)--BASF is to sell its styrene monomer site at Ulsan, South Korea, to SK Energy and is considering capacity reductions to improve profitability in the styrenics chain, the German chemical company said on Monday.

The sale, which includes the 320,000 tonne/year styrene monomer plant and the 50,000m2 site at Ulsan, will affect 34 employees, most of whom have accepted early retirement programmes, BASF said.

No financial details related to the sale were disclosed.

The site has been idle since October 2008 due to an oversupply of styrene monomer in the regional market, said BASF’s Hyung Tae Chang, who is group vice president for styrenics Asia.

“We are now obtaining styrene monomer from other sources and will continue to supply our Asian customers with the plastics polystyrene, acylonitrile-butadiene-styrene copolymer (ABS) and expandable polystyrene (EPS) from a production plant at another BASF site in Ulsan,” added Hyung.

BASF’s global styrenics president, Joachim Streu, said the company was working to restructure and significantly improve profitability in the styrenics chain.

“We are considering all options, including capacity reductions, such as the closure of an 80,000 tonne/year polystyrene plant in Ludwigshafen, Germany, in June 2009,” he added.

The news comes at a time when some staff at BASF’s main German production site have already begun working reduced hours as sales volumes have fallen.

Last week, BASF reported that its second-quarter net profits dropped 73.6% year on year to €343m ($490m) as the company continued to be hit by the global economic crisis.

($1 = €0.70)

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By: Lucy Craymer
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