BASF SE will shut down its TDI feedstock plant in Ludwigshafen, Germany, due to reduced demand and also reduce production of feedstocks for nylon an other materials.
“Demand for TDI has developed only very weakly, — especially in Europe, Middle East and Africa — and has been significantly below expectations,” the company said. “The TDI complex in Ludwigshafen has been underutilized and has not met expectations in terms of economic performance.”
BASF also announced close plants at thesite making the TDI precursors dinitrotoluene and toluene diamine.
European customers will be served from its other three global TDI production sites. These are at Geismar, La., on the U.S. Gulf Coast, Yeosu, South Korea, and Shanghai.
Further changes planned at the verbund structures in Ludwigshafen include closing the caprolactam plant and one of the two ammonia plants. The company said that the Antwerp, Belgium, caprolactam plant and the second ammonia unit in Ludwigshafen will be sufficient to serve demand in Europe.
The capacity in Ludwigshafen for adipic acid will also be reduced, and the plants for cyclohexanol, cyclohexanone and soda ash there will be shut down.
The company said it expects the changes to reduced fixed costs by more than 200 million euros ($212 million) per year by the end of 2026. About 700 production jobs are likely to be affected, with the company saying it hopes to offer most jobs at other plants.
These closures are part of a wider cost-cutting plan for its European business. The changes will be made this year and in 2023 and are expected to create annual cost savings of more than 500 million euros ($530 million) in non-production areas. This will include bundling services consistently in hubs, simplifying divisional management structures, right-sizing business services, and increasing R&D efficiency.
About half of the savings are expected to be made in Ludwigshafen.
“Globally, the measures are expected to have a net effect on around 2,600 positions,” the company said. “This figure includes the creation of new positions, in particular in hubs.”