BASF to close several major assets at Ludwigshafen on high production costs

LUDWIGSHAFEN, Germany (ICIS)–BASF is to close several plants at its key site in Ludwigshafen on the back of high production costs, the German chemicals major said on Friday.

The shutdowns of various assets and reduction of output for other products at BASF’s Verbund site are expected to lower fixed costs by €200m/year by the end of 2026.

“Europe’s competitiveness is increasingly suffering from overregulation, slow and bureaucratic permitting processes and, in particular, high costs for most production input factors,” said BASF CEO Martin Brudermuller.

The measures include:

– The closure of one ammonia plants and associated facilities
– Closure of the caprolactam (capro) plant
– Closure of cyclohexanol and cyclohexanone lines
– Closure of a soda ash unit
– Closure of the toluene di-isocyanate (TDI) plant and precursor plants for dinitrotoluene (DNT) and TDA (toluene diamine)
– Reduction of the adipic acid production capacity

In total, 10% of the asset replacement value at the site will be affected by the adaption of Verbund structures.

The cuts are expected to impact around 700 jobs.

Brudermuller, said that most affected employees would be able to move to other plants, as there vacancies and other colleagues are set to retire.

The company has also introduced other cost control measures as the current economic backdrop has weighed on Europe.

The firm hopes to save more than €500m/year by the end of 2024 but warned of high levels of uncertainty for the coming year.

Earlier on Friday, BASF published its fourth-quarter and full-year financial results which showed it had generated losses due to impairments related to its Russian assets.

The chemicals major’s shares were down nearly 6% in Friday morning trading compared to the prior close.

Front page picture: A view of a storage tank at BASF’s Ludwigshafen site; archive image 
Source: Ronald Wittek/EPA-EFE/Shutterstock

Clarification: Re-casts paragraph 5