21 September 2012 11:05 [Source: ICB]
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 says.
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 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", according to 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.
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