BASF Permanently Reduces Operations in Europe Due to Surging Energy Costs, Tighter Regulations

Global chemical producer BASF is quickly cutting back its European operations as surging energy costs and tightened regulations in the region make it increasingly difficult to remain competitive.

BASF on Wednesday said it will slash costs in the EU “as quickly as possible and also permanently” as energy prices in the region become too high for business sustainability. The chemical giant revealed natural gas costs at its European sites were €2.2 billion higher in the first nine months of 2022 compared to the same period one year ago. “The European chemical market has been growing only weakly for about a decade [and] the significant increase in natural gas and power prices over the course of this year is putting pressure on chemical value chains,” said the company’s CEO Martin Brudermüller.

The company’s third quarter sales increased 12% year-over-year to €21.9 billion, largely due to higher prices. Profits before tax slumped €538 million to €1.2 billion, which the chemical maker blamed on lower earnings across its chemical division. Germany is one of BASF’s most crucial revenue markets, accounting for about 18% of sales since the beginning of the year. However, Brudermüller explained the cost cuts were essential in safeguarding “our medium and long-term competitiveness in Germany and Europe.”

BASF’s latest announcement comes as the company last month started up the first portion of its new €10 billion plastics engineering facility located in China, which is expected to boost chemical supply for the country’s increasing demand.

Information for this briefing was found via BASF. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

July 22 Doomsday: Gazprom Cannot Guarantee “Good Functioning” Nord Stream Pipeline, Points To Turbine In Repair From Canada

As the Nord Stream 1 pipeline undergoes its scheduled 10-day maintenance, all eyes are on...

Wednesday, July 13, 2022, 01:32:00 PM

US Threatens New Tariffs on $3.1 Billion European Imports

Canada may soon not be the only one targeted by new US tariffs. It appears...

Thursday, June 25, 2020, 06:15:00 PM

Global Energy Crisis Continues To Grow; May Not Be Too Late for Investors to Increase Their Exposure to Energy Plays

The global energy crisis seems to grow more acute each day, and the effects of...

Wednesday, October 13, 2021, 03:39:00 PM

European Green Tech Industry Faces Challenges Amidst Calls for Domestic Manufacturing Boost

Solar industry leaders gathered in Madrid on Thursday to caution about the obstacles hindering Europe’s...

Friday, October 6, 2023, 12:56:00 PM

Germany Gas Reserves Now At 91.3%, Ahead Of 95% Target By November 1

After reports circulated that Germany might miss its November 1 target of filling up 95%...

Tuesday, September 27, 2022, 01:44:00 PM