BASF SE (BAS), the world’s largest chemical maker, will shutter a pigment production plant in Scotland while adding capacity in Asia as it seeks to boost profitability at its performance products division.
The measures are part of plans to cut 650 jobs in the pigments unit globally by 2017, Ludwigshafen, Germany-based BASF said in a statement. The company will meanwhile invest 250 million euros ($344 million) in expanding capacity in Nanjing, China and Ulsan, South Korea, as well as in research.
“The measures we are undertaking will make us more responsive to market and customer needs,” Markus Kramer, the head of BASF’s dispersions and pigments operations, said in the statement. “The future global production network will enable us to reliably and efficiently supply our partners from a competitive base.”
The cuts add to the scrapping of 500 positions in the plastic-additives and pigment operations around Basel, Switzerland announced in April. BASF is joining rivals Saudi Basic Industries Corp. (SABIC) and Clariant AG (CLN) in making cutbacks as the advent of low-cost producers in Asia and a renaissance in the U.S.’s commodity chemical industry on the back of shale gas changes the dynamics of the marketplace.
The closure of the pigments plant in Paisley, Scotland will see 143 employees lose their jobs, while a further 140 employees will leave the manufacturing site in Huningue, France. BASF may also sell or close its Maastricht factory in the Netherlands.
Earnings before interest, taxes, depreciation and amortization at the performance products division as a proportion of sales fell to 13.3 percent last year from a 2010 peak of 17.6 percent.
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