BASF to run three of its units as separate businesses
BASF plans to turn its agriculture, battery materials and coatings businesses into autonomous units to try to boost earnings, a major revamp for the German chemicals giant that has traditionally been highly integrated.
The company, with sales of €87bn in 2022, will create legally separate entities for the three units, trade union IGBCE said in a statement on Thursday. This was confirmed by a company spokesperson.
Over the past two years, BASF has also made its catalytic converter business, which relies on combustion-engine powered cars, a stand-alone subsidiary ready for “strategic options”.
The company said in October that there were no current plans to sell the catalyst unit and on Thursday said any change in ownership of the three additional units earmarked for a separation was not on the agenda.
Unlike major rivals such as Dow and DuPont, BASF has traditionally relied on integrated chemical complexes known as Verbund, producing most of its intermediate substances inhouse in order to cut transportation and energy costs and use by-products.
“Businesses that are less deeply integrated into the Verbund will gain more space to meet the needs of their specific customer industries while keeping the benefits of an integrated company,” BASF said in a statement, calling it a “more differentiated approach to steering individual businesses”.
The union said close to 2,500 employees will be affected by the overhaul at BASF’s Ludwigshafen headquarters, or almost 10% of staff at the site.
The Agricultural Solutions unit had €10.3bn in sales in 2022, competing with Bayer, Corteva and China’s Syngenta.
Battery materials and related recycling business units generated sales of more than €1bn in 2022, but it is one of two areas where BASF invests the most, the other being a new chemical complex in Zhanjiang in southern China.
The coatings business had €4.2bn in revenue in 2022, selling mainly to carmakers and repair shops.