BASF new efficiency drive may involve job cuts

By Gareth Macdonald contact

- Last updated on GMT

BASF: "Some of these measures may include job reductions, but we expect to be able to absorb these through normal employee turnover."
BASF: "Some of these measures may include job reductions, but we expect to be able to absorb these through normal employee turnover."

Related tags: Fatty acid, Omega-3 fatty acid, Active ingredient

BASF expects to reduce its workforce though natural employee turnover rather than redundancies as part of a new €1bn cost cutting plan.

The “DrivE” efficiency programme outlined by the German chemicals firm last week is a two-year plan designed to improve operations and make “annual earnings contribution of €1bn​.”

A BASF spokeswoman told us manufacturing will be the main focus of the efficiency drive, explaining that: “DrivE mainly includes measures in production, such as debottlenecking, savings in variable production costs, for example, through more efficient use of raw materials and energy​.”

In addition, it targets process improvement outside production. Some of these measures may include job reductions, but we expect to be able to absorb these through normal employee turnover​” she added.

BASF’s current cost cutting effort – a programme called STEP that is also focused on process optimization and reducing CAPEx – will run until the end of the year.

Both programmes are separate from the restructuring of BASF’s performance products division which, in addition to drug actives, makes cosmetic ingredients, plastic additives and chemicals used by the oil and gas industry.

When the preformance products plan was announced in April 2013, BASF said it would "lead to a reduction of a total of up to 350 positions in the Basel area by the end of 2015" ​explaining that this would be achieved through "the pooling of tasks at other sites​."

API sale

BASF unveiled DrivE a few days before it completed the sale of a large part of its active pharmaceutical ingredients (API) business to Swiss contractor Siegfried Holdings.

When asked if the deal signalled that the pharmaceutical sector has become less important for the spokeswoman said that APIs not sold to Siegfried - ibuprofen, omega-3 fatty acids and polyethylenglycol (PEG) – “will remain a key part of BASF’s portfolio​.”

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