The German chemical group BASF is going to cut 3,300 jobs, mainly in Germany. BASF announced this on Friday.
On the one hand, BASF will cut some 2,600 jobs in non-production departments. Half of the cost savings must come from the BASF site in Ludwigshafen, Germany. About 700 jobs will also disappear during production at the same site. BASF wants to close an ammonia plant there. “The capacity of the ammonia plant in Antwerp is sufficient” to meet future demand in Europe, it sounds. The production employees involved could work elsewhere in the group.
The measures should lead to a combined annual cost saving of 700 million euros.
“Europe’s competitiveness is increasingly suffering from over-regulation, slow and bureaucratic licensing procedures and, above all, high costs for most factors of production,” CEO Martin Brudermüller said in a press release. “All this has already dampened market growth in Europe compared to other regions. High energy prices are now putting an extra brake on profitability and competitiveness in Europe.”
The chemical group says that its energy costs worldwide rose by 3.2 billion euros last year. Europe accounted for about 84 percent of this increase, which mainly affected the site in Ludwigshafen.
In red
The higher energy costs are partly responsible for the drop in operating profit (EBIT) for exceptional items: -11.5 percent to 6.9 billion euros. And that despite an increase in turnover of 11 percent to 87.3 billion euros. BASF had previously announced that it would plunge into the red due to billions in write-downs on the Russian activities of oil and gas subsidiary Wintershall Dea. The net loss ultimately amounted to 627 million euros, against a profit of 5.5 billion euros in 2021.
BASF is not very optimistic for this year. All factors that played a role in 2022 (expensive energy and raw materials, inflation …) will continue in 2023 and “negatively affect global demand”, it sounds. On this basis, the German group expects a turnover of 84 to 87 billion euros and an operating profit for exceptional items of 4.8 to 5.4 billion euros.
According to its website, BASF employs about 4,000 people in Belgium, the majority at the site in the port of Antwerp.
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