BASF "the world's biggest chemical company" is to shut down 80 production units and reduce production at another 100 as a temporary measure to avoid overcapacity "as a result of a massive decline in demand."
Since the company acknowledged the difficult economic situation at the end of October, customer demand in key markets has declined significantly, said chairman Dr Jürgen Hambrecht. "In particular, customers in the automotive industry have cancelled orders at short notice." This has been further exacerbated by increased reduction of inventory by customers.
The measures mainly affect operations that supply the automotive, construction and textile industries and include the manufacture of ammonia, styrene and polyamide. The shutdowns will be coordinated throughout BASF's global production Verbund (backwards integration structure) at all six Verbund sites in Europe, Asia and North America, as well as other sites. Implementation of most of the measures has already started - for instance reductions in polystyrene and caprolactam production were announced in September and October. Reduced capacities are expected to last until January 2009 - or beyond if the period of weak demand continues and all other flexible working time models have been exhausted. Worldwide, around 20,000 employees will be affected.
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