More lean times ahead for chemical industry

His comments, delivered yesterday as the chemicals group unveiled a new corporate brand, came amid further evidence of the problems besetting the European chemical majors. Demand for their products has been faltering, hit by the downturn in the global economy at the same time as raw materials prices have been escalating.

On the same day, Akzo Nobel​ of the Netherlands announced that it would be cutting a further 100 jobs at its polymer chemicals unit to reduce manufacturing costs, while France's Rhodia said that 572 jobs would go in France as a result of a reorganisation of its support functions. Both companies are in the midst of comprehensive restructuring drives to improve their finances.

"The good times are over,"​ said Hambrecht at a press conference to introduce the new company logo and set out the company's stall as it refocuses on profitability rather than sales growth. This will entail the introduction of a new performance indicator, earnings before interest and taxes after cost of capital, he noted.

He predicted that the world chemical industry will average 2.7 per cent growth between 2001 and 2015, compared to GDP growth estimated at 3.1 percent growth during that period.

In the long-term, BASF​ sees considerable potential in biotechnology, nanotechnology, materials science and energy management. These will be the drivers for the chemical industry in the future, he predicted, laying a particular emphasis on biotechnology.

Meanwhile, Rhodia​ was also affected by news that the company's creditors are pressuring it to undertake a €300 million rights offering early next year as a condition of a debt refinancing deal, according to a report in the Financial Times​.

Earlier this week, the company had sought approval from its bank for a plan to refinance its current debt burden, which stands at around €2 billion.