As of: February 23, 2024, 10:53 a.m
By: Bona Hyun
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Weak demand in Europe, adverse conditions and increased energy prices are making business difficult.
BASF is now taking austerity measures.
Ludwigshafen – The chemical company BASF is launching another savings program due to weak demand in Europe.
The Dax group announced on Friday (February 23, 2024) that additional costs of one billion euros should be saved at the Ludwigshafen site by 2026.
This also has consequences for the employees: “Unfortunately, the program will also entail further job cuts,” said company boss Martin Brudermüller on Friday.
Details are therefore currently being worked out.
Chemical company BASF is cutting even more jobs in Ludwigshafen
It is urgently necessary to “take further decisive measures to improve our competitiveness,” explained CEO Brudermüller on Friday when presenting the balance sheet.
The result in Germany is suffering from the significant losses at the company's largest production site.
BASF is cutting even more jobs in Ludwigshafen © Uwe Anspach/dpa
The Management Board's outlook for this year is cautious: the weakness of the global economic dynamic is likely to continue, and growth is only expected to strengthen somewhat as the year progresses.
BASF is targeting earnings before interest, taxes, depreciation and amortization (Ebitda) and special items of between 8 billion and 8.6 billion euros.
As already known, in 2023 the result fell by almost 29 percent to almost 7.7 billion euros.
BASF wants to save another billion in Ludwigshafen
The BASF management had already announced an austerity program in 2022 due to worsening business and more difficult conditions in Europe, especially due to sharp increases in gas prices.
This is intended to reduce annual costs by a total of 1.1 billion euros by the end of 2026.
There are also further measures with which BASF wants to reduce annual costs by 500 million euros from the end of 2026.
The measures already include the reduction of jobs and the closure of several chemical plants.
The energy-intensive chemical industry is suffering from the comparatively high energy prices in Germany - BASF, as the largest industrial gas consumer in this country, is feeling this like no other company.
According to the Ifo Institute, the demand situation in the chemical industry deteriorated further in January, and hopes for more orders from abroad were largely dashed.
BASF suffers from high energy prices - consequences for employees
Brudermüller takes stock of the world's largest chemical company for the last time.
At the end of the general meeting at the end of April, he will hand over the helm to Asia boss Markus Kamieth and will then lead the Mercedes-Benz supervisory board.
Kamieth now has to lead the group out of the deep crisis that led to a slump in sales and earnings at BASF last year.
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At the beginning of January, BASF published preliminary figures for 2023, which missed both analysts' expectations and the company's already lowered targets.
The operating profit (EBIT) before special items fell by 45 percent to 3.8 billion euros, and sales shrank by a good fifth to 68.9 billion euros.
(bohy with agencies)