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BASF is taking a number of steps to strengthen the competitiveness of its Performance Products segment. The segment bundles BASF’s businesses with chemicals that improve the properties of many different end-user products. The portfolio includes ingredients for personal care, cosmetics, pharmaceuticals, plastic additives, pigments and paper chemicals as well as chemicals used in oil and gas production and mining. In some market segments, increasing standardisation and the entry of new competitors have changed the business environment significantly. This especially applies to the markets for plastic additives and pigments as well as for water, leather and textile chemicals.
BASF aims to adapt its businesses to the changed market environment and significantly increase competitiveness in the coming years by streamlining processes, investing in new technologies and adjusting its portfolio and its organisational setup. The currently planned measures will lead to a reduction of about 500 positions worldwide by the end of 2015.
"The expansion of our speciality business in the Performance Products segment made us more robust to economic fluctuations. However, the growth and profitability of the standard products do not yet meet our requirements. We have, therefore, identified numerous measures, which we are implementing step by step. Further measures are being analysed,” said Michael Heinz, member of the Board of Executive Directors of BASF SE and responsible for the Performance Products segment.
Restructuring in the Basel area
BASF aims to improve the efficiency and profitability of the Plastic Additives and Pigments & Resins business units in Europe, which are mainly located in the Basel area. In the Pigments & Resins business unit, European product and quality management and product safety will be pooled in Ludwigshafen. Global product management lead will be bundled in Hong Kong. In this way, synergies can be generated by bundling expertise and competencies.
In the Plastic Additives business, a more market-oriented approach will be introduced. The product-related development and application technology will sharpen its focus on key topics and customer industries and will be organized more efficiently through a network of global competence centers in different locations worldwide. In addition, supporting functions, such as technology and strategy management as well as controlling, will be consolidated in Ludwigshafen
The adjusted market strategies will lead to a decrease in the need for product-related research in plastic additives and pigments in the Research Center Basel. Therefore, the Research Center Basel will be scaled down and better aligned with the further developed strategy of BASF. There will also be less need for administrative services provided by the Business Center Switzerland for the BASF Group companies in Switzerland. This will lead to a job reduction in the Basel-based Business Center Switzerland. The Paper Chemicals division, headquartered in Basel, is not affected by the current measures.
The restructuring will lead to a reduction of a total of up to 350 positions in the Basel area by the end of 2015. This includes the pooling of tasks at other sites. BASF aims to implement the job reductions related to the restructuring measures in the Basel area in a socially responsible manner. BASF will attempt to find job opportunities in other BASF Group companies for as many employees as possible. Further details are subject to consultations with employee representatives on the basis of the existing social plan.
Implementation of previously announced measures
BASF has already announced that it is combining its businesses with water, oilfield and mining solutions into a new global business unit. The increase in efficiency in the polyacrylamide (PAM) value chain will lead to a reduction of positions in the water chemicals business, mainly at the sites in Bradford and Grimsby, United Kingdom. Additionally, BASF is planning to divest its industrial water management business, located in Lyon, France, to a strategic partner .
In the business with leather and textile chemicals, BASF will increase its focus on the growing Asia Pacific region and high value-adding applications such as applications for the leather automotive industry and premium textile articles. The global R&D activities for both businesses will be established in Shanghai, China.