No plans for additional Europe plant closures – BASF chief

LONDON (ICIS)–BASF has no plans for additional plant closures in Europe following the spate of shutdowns announced by the company earlier in the year, CEO Martin Brudermuller said on Friday.

Despite Europe’s beleaguered competitive position in light of low demand and high energy pricing, moves to rationalise BASF’s production footprint in the region are likely to be restricted at present to closures announced in February, Brudermuller said. There is still value in participating in local markets, he added.

“We announced that we are closing down some plants and that’s it for now,” he said, speaking on a press call on Friday. “We are not going to continue closing down plants.”

The company announced closure plans for a sheaf of units at its Ludwigshafen, Germany, verbund site in February this year, including one of the two ammonia plants there, along with soda ash, caprolactam, cyclohexanol and toluene di-isocyanate capacities.

The calculus in selecting which units to close was based on factors beyond competitiveness and energy, according to Brudermuller, with decarbonisation expenses and maintenance costs also playing a role.

“We’re not obviously only looking at production looking forward,” Brudermuller said. “What are the energy costs in Europe? How competitive are we? We also have to consider how much we have to invest in the future in order to maintain these plants and how much do we have to invest in order to decarbonise [them]?

“All these taken together gives us an overall picture on whether the plant is sustainable or not,” he added.

Despite difficult operating conditions for chemicals in Europe, particularly higher up the value chain, base chemicals with demand potential in higher-value applications have retained viable margins, which drove the decision to keep on Ludwigshafen ammonia plant open.

“If you look at base chemicals where no added value is the consequence it gets difficult,” he said.

“If you can continue using the chemicals and refining them, then it makes sense,” he added.

Front page picture shows BASF plant in Schwarzheide, Germany (image credit: Action Press/Shutterstock)