UpdateGermany’s BASF exits India, Malaysia EPS ops by end-'12

18 September 2012 09:25  [Source: ICIS news]

(adds detail in lead and throughout, plans in South America)

SINGAPORE (ICIS)--BASF will permanently shut down expandable polystyrene (EPS) operations in India and Malaysia by the end of the year while in South America the company is preparing carve-outs and other strategic options for its EPS business, the German chemicals firm said on Tuesday.

The plants in Pasir Gudang Malaysia and Thane, India, have a combined EPS capacity of more than 100,000 tonnes/year, it said in a statement.

“In light of high overcapacities and low margins in some regions, BASF is focusing its global Styropor (EPS) activities on strategic markets and core products with better profitability,” the company said.

A total of 115 employees will be affected – 60 in Malaysia and 55 in India, BASF said.

“BASF will work with employees affected by the shutdowns to find the right transition plan,” it said.

The plants’ closure “has become inevitable”, the company said citing “uneconomic operations” as “high EPS overcapacities in Asia Pacific that have developed in recent years” led to “extremely low margins”, said Giorgio Greening, head of the global business unit for foams at BASF.

In South America, BASF currently has around 80 employees and a production capacity of 83,500 tonnes/year, it said.

“BASF has started the preparations of a carve-out of the Styropor business and production at its sites in Argentina and Brazil. In Chile, BASF is evaluating strategic options for the EPS business and is preparing a divestment of Aislapol, BASF’s EPS foam parts producer,” the company said.

BASF is currently looking for a strategic investor for Aislapol, which has around 175 employees, that is committed to the EPS foaming business.

“Globally, we are focusing our EPS investments on Neopor. The carve-out of the Styropor business in Brazil and Argentina will help us to be flexible with regards to future strategic options,” Greening said.

Neopor – a silver-gray colored product with improved insulation properties, enhanced by its graphite content – contributes significantly to energy efficiency in buildings and houses while reducing carbon dioxide emissions, BASF said.

BASF produces Neopor in South Korea and Germany.

By: Pearl Bantillo
+65 6780 4359

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