Massive BASF group restructuring: 2,500 employees affected - spin-off of agricultural chemicals and battery material areas

Massive BASF group restructuring: 2,500 employees affected - spin-off of agricultural chemicals and battery material areas

According to a report by www.n-tv.de, the Ludwigshafen-based chemical group BASF is planning a massive corporate restructuring in which the agricultural chemicals business and the battery materials business will be separated from BASF SE and transferred into legally independent units. Almost ten percent of the workforce at the main plant in Ludwigshafen, around 2,500 employees, are affected by this measure. However, there are no plans for layoffs.

The planned spin-off and restructuring of the agricultural chemicals and battery materials business areas aims to increase BASF's competitiveness. CFO Dirk Elvermann emphasized that the stores should be given more space to meet the needs of their specific customer industries. The company is aiming for an operating return (Ebitda margin) of 30 percent or more in the battery materials business in the future, while the agricultural chemicals business should achieve a return of 23 percent or more and the coatings business should achieve a return of 15 percent or more in the medium term.

The IG BCE union expressed concern about the spin-off and spoke of bad news for the workforce. She called for an extended location agreement at the main plant until 2030 and emphasized that operational layoffs in Ludwigshafen would be ruled out until the end of 2025. CEO Martin Brudermüller had also announced a new savings program that would affect 2,600 jobs worldwide, almost two thirds of them in Germany. Several energy-intensive systems at the main plant in Ludwigshafen are to be closed.

In addition, BASF will no longer provide sales forecasts in the future, but will only state targets for earnings before interest, taxes, depreciation and special items (adjusted Ebitda) and cash inflow.

These far-reaching restructuring measures at BASF could lead to significant changes on the market and in the financial industry. The planned restructuring, coupled with the loss of sales forecasts, could unsettle investors and influence the company's share prices. In addition, potential impacts on jobs and the industrial landscape in Ludwigshafen are to be expected. BASF's strategy to focus more on the areas of battery materials, agricultural chemicals and coatings reflects the trend towards electromobility and the increasing demand for sustainable products. This could have long-term positive effects on the company's competitiveness.