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December 2, 2008 |
Global chemicals and coatings company BASF, Ludwigshafen, Germany, is temporarily shutting down approximately 80 plants worldwide, including plants in the US, to deal with a "massive decline in demand." The company is also reducing production at approximately 100 plants.
"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 Dr. Jürgen Hambrecht, chairman of the board of executive directors of BASF SE in a statement. "In particular, customers in the automotive industry have canceled orders at short notice."
In addition, sales volumes are being negatively impacted by increased reduction of inventory by customers and a lack of credit in customer industries, said the company.
"In 2008, BASF will therefore not achieve the previous year's excellent EBIT before special items. How the coming year will develop is difficult to foresee. BASF is preparing for tough times," said Hambrecht.
Worldwide, approximately 20,000 employees will be affected by the production cuts. Flexible working time arrangements will be used wherever possible.
The adjustments are primarily being carried out in units that supply the automotive, construction and textile industries. Supply chains affected include ammonia, styrene and polyamide, which manufacture precursors for engineering plastics, coatings and fibers. The shutdowns will be coordinated throughout BASF's global production Verbund and will involve all six Verbund sites in Europe, Asia and North America, as well as other sites. Implementation of most of the measures has already started; reduced capacities are expected to last until January 2009 for individual plants. 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, said the company.
www.basf.com
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