04 October 2012 14:27 [Source: ICIS news]
LONDON (ICIS)--BASF is to cut 400 jobs from its construction chemicals business and shift focus for the unit away from southern Europe and the UK, where construction demand remains weak, the Germany-based chemicals major said on Thursday.
A spokesperson for the company declined to say where the cuts would fall, citing ongoing discussions with employee representatives in different markets, but stated that the bulk of the restructuring is expected to be completed in the first quarter of 2013.
The company had around 7,000 employees in its construction chemicals business as of the end of 2011, the spokesperson said.
BASF also announced plans to sell MEYCO Equipment, its Swiss concrete spraying machine business, as a non-core asset. BASF announced plans to divest another Swiss asset, its CONICA sports surfaces business, earlier this year.
Construction levels in many southern European countries has plummeted since the onset of the financial crisis and the burst of the real estate bubble, with construction in Portugal and Spain down 50% from pre-crisis levels, according to BASF. Investment in Greek construction has fallen by 60%, and the Italian construction industry has been weak through 2012, the company said.
The company is also planning to reduce production capacity in the UK, where construction activity has also declined sharply since 2008.
“The construction industry in many European countries continues to be challenged,” said Tilman Krauch, president of BASF’s construction chemicals division.
The absence of an expected construction boom in eastern Europe is also leading the company to roll back its presence in that region, BASF said.
“The growth that we expected [in eastern Europe] is just not coming,” said BASF spokesperson Christian Schroepfer.
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