BASF’s new CEO, Markus Kamieth, has committed to investing billions in the company’s main site in Ludwigshafen. Despite this investment pledge, the chemical giant also aims to implement significant cost-cutting measures at the location.
Balancing investment and cost reduction
Kamieth expressed confidence in the Ludwigshafen site, stating that “78 percent of the plants are future-proof. I find that impressively high.” The company plans to invest billions in maintaining, modernizing, and expanding its headquarters over the coming years. However, facing global economic challenges, BASF also needs to reduce costs at the Ludwigshafen site by 1.1 billion euros by 2026 – nearly half of the company’s worldwide savings target of 2.1 billion euros.
Potential plant closures and employment agreements
BASF recently confirmed it would evaluate closing additional plants due to lack of competitiveness, including at the Ludwigshafen site where layoffs are ruled out until 2025. Regarding a new site agreement, Kamieth told Handelsblatt he was open to the idea, provided it aligns with the company’s strategy of combining investments with cost reductions. He expressed optimism about reaching an agreement with employees, stating, “If we end up finding a site agreement characterized by ‘leaner but stronger,’ I’m very much in favor of it.”
Commitment to China investment despite challenges
Despite China’s economic slowdown, Kamieth remains committed to the planned 10 billion euro investment in a new integrated site there. “I remain optimistic about China’s economic development in the medium and long term,” he said, while acknowledging the need to adjust expectations for lower growth rates in the country.
