BASF to Cut Cost Structure in Europe
October 26, 2022
BASF: European operations need to be cut to size ‘permanently’
Ludwig Burger Reuters
Oct 26, 2022 01:22AM EDT
BASF said costs at sites in its European home market need to be brought to a “permanently” lower level because of a triple burden of sluggish growth, high energy costs and over-regulation.
Adds background on job cuts, Covestro
FRANKFURT, Oct 26 (Reuters) – BASF BASFn.DE said costs at sites in its European home market need to be brought to a “permanently” lower level because of a triple burden of sluggish growth, high energy costs and over-regulation.
“These challenging framework conditions in Europe endanger the international competitiveness of European producers and force us to adapt our cost structures as quickly as possible and also permanently,” CEO Martin Brudermueller said in a statement on Wednesday.
In the first nine months of 2022, natural gas costs at BASF’s European sites were about 2.2 billion euros ($2.19 billion) higher than in the year-earlier period, the company added.
As part of an unscheduled release of preliminary third-quarter results two weeks ago, BASF said it would reduce annual costs by 500 million euros in Europe up to 2024, including job cuts, and it also raised the prospect of more structural cutbacks in the region to be announced next year.
Covestro 1COV.DE, a rival maker of chemicals for insulation slabs and upholstery foams, on Tuesday cut its earnings guidance, as soaring gas and raw material prices burden heavy industry players across Europe.
(Reporting by Ludwig Burger, Editing by Miranda Murray)