MAR / APR 2024
More cuts to come at Ludwigshafen
In its annual results presentation , BASF announced plans to reduce costs at its main verbund site in Ludwigshafen by a further € 1 billion / year by the end of 2026 . This comes on top of a similar scale of cuts initiated in late 2022 .
Last year , results in Germany suffered due to substantially negative earnings at Ludwigshafen , the company said . This is attributed to two main causes : the temporary low-demand environment is affecting volume development both upstream and downstream , while structurally high energy prices are raising production costs upstream .
The cost reduction programme will target production and non-production areas . BASF will seek to adapt production capacities to market needs and significantly trim variable costs by redesigning processes . It will also endeavour to improve utilisation rates , which are “ considerably below normal levels ”. There will be an as yet unspecified number of job cuts .
The board expects to present a target picture in 2H 2024 , based on the regulatory framework and the changed market realities in Europe and Germany . Board chairman Martin Brudermüller said : “ The board team will remain strongly committed to the Ludwigshafen site . We want to develop Ludwigshafen into the leading low-CO 2
-emission chemical production site with high profitability and sustainability .”
BASF saw sales fall from € 87.3 billion to € 68.9 billion in the 2023 business year , mainly driven by considerably lower prices and volumes . Sales volumes fell in all segments as a result of weak demand . However , it managed to increase cash flows from operating activities by 5.2 % to € 8.1 billion .
EBIT before special items fell from € 6.9 billion in 2022 to € 3.8 billion , primarily due to a considerably lower earnings contribution from the Chemicals and Materials segments . Only the Agricultural Solutions business really bucked this trend . The company also saw a big fall in EBIT to € 2.2 billion because of various impairments on property , plant and equipment and on tangible and intangible assets .
Ludwigshafen is BASF ’ s biggest site
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MAR / APR 2024 SPECCHEMONLINE . COM
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