BASF, the world’s largest chemical company, is facing cost pressures and high energy prices. The company plans to announce a new strategy, focusing on restructuring its largest production site in Ludwigshafen.
Chemical giant BASF is set to unveil its new strategy on Thursday, with Chief Executive Markus Kamieth leading the presentation. The company has already implemented a billion-euro cost-saving program in February, including job cuts and plant closures, in response to ongoing cost pressures and high energy prices. The main focus of the restructuring efforts is the company’s headquarters and largest production site in Ludwigshafen, Germany.
Potential changes in agricultural business
Media reports suggest that BASF’s agricultural business could see a significant reorganization. In late 2023, the Ludwigshafen-based company announced plans to establish its agricultural chemicals, battery materials, and coatings businesses as legally independent subsidiaries, citing their relatively low integration with the rest of the group.
While former CEO Martin Brudermüller had previously ruled out selling these divisions, recent reports indicate that the agricultural chemicals unit might be preparing for a multi-billion euro initial public offering (IPO). This comes after BASF’s second-quarter results were negatively impacted by lower selling prices and significantly weaker agrochemicals business.
Ongoing cost-cutting initiatives
BASF announced a comprehensive savings program in 2022, aiming to reduce annual costs by 1.1 billion euros by the end of 2026. This plan includes cutting around 3,300 jobs worldwide, with 700 positions to be eliminated in production at the Ludwigshafen site, as well as the closure of several energy-intensive chemical plants.
The latest cost-cutting program targets additional annual savings of one billion euros at the Ludwigshafen site by the end of 2026. However, the exact number of job cuts at the headquarters remains unclear.
