BASF AG is shutting 80 plants worldwide and reducing production at 100 more in an effort to address declining demand for its polymer and chemical products. The Ludwigshafen, Germany-based giant announced Nov. 19 that 20,000 of its 95,000 employees would be affected by the production cuts.
Plastics-related cuts include:
* Temporary shutdown of low density polyethylene and ethylene glycol feedstock production in Nanjing, China.
* Temporary shutdown of toluene diisocyanate, a polyurethane feedstock, in Freeport, Texas, and Geismar, La.
* Reduced capacity for nylon resin and nylon feedstock caprolactam in Port Arthur, Texas, and Antwerp, Belgium.
* Reduced capacity for caprolactam in Ludwigshafen.
* Reduced capacity for ABS resin and polyurethane feedstock methyl diisocyanate in Antwerp.
Temporary shutdowns are expected to last until at least January 2009. BASF earlier this month had announced short-term shutdowns of caprolactam production in Geismar and Freeport.
Flexible working-time arrangements will be used wherever possible, the firm said, adding that 5,000 of the affected employees work at its Ludwigshafen complex in Germany.
``We already drew attention to the difficult economic situation at the end of October. Since then, customer demand in key markets has declined significantly,'' said Jurgen Hambrecht, chairman of the board of executive directors at BASF. ``In particular, customers in the automotive industry have canceled orders at short notice.''
The company said it already has started to implement the cuts; and, where capacities are being reduced at individual plants, these are expected to last until January.
``Should the period of weak demand continue and if all other flexible working time models have been exhausted, the company cannot rule out the need for short-time working at individual sites worldwide,'' it said.
The affected business units are primarily those that supply the automotive, construction and textile industries. These include the ammonia, styrene and polyamide businesses, which manufacture precursors for engineering plastics, coatings and fibers.
BASF's move follows similar cutbacks by other polymer producers this month, including LyondellBasell Industries AF SCA and Ineos Group, which also have blamed a sudden fall in demand for their products.
``We are responding flexibly to market developments and are acting quickly,'' Hambrecht said, adding that BASF now will focus more closely on its costs and budget.
Plastics News senior reporter Frank Esposito contributed to this report.
