In 2022, BASF Group sales will be 87.3 billion euros, a year-on-year increase of 11.1%

The German chemical giant BASF released a performance report on the 24th, stating that in 2022, BASF Group sales will be 87.3 billion euros, an increase of 11.1% year-on-year; earnings before interest and taxes excluding special items will be 6.9 billion euros, a year-on-year decrease of 11.5%; Earnings were negative EUR 627 million and EUR 5.5 billion in 2021.

BASF said that in 2022, the BASF Group's operating profit will be affected by additional energy costs of 3.2 billion euros worldwide. Europe accounted for around 84% of this cost increase, with the greatest impact on the integrated site in Ludwigshafen. Rising natural gas costs accounted for 69% of the overall increase in global energy costs.

In the fourth quarter of 2022, BASF Group's sales fell by 2.3% to 19.3 billion euros due to the decline in sales. Net income was negative EUR 4.8 billion, compared with EUR 898 million in the same period in 2021, the decrease was mainly due to the impairment of the Wintershall Dea stake.

BASF expects group sales in 2023 to be between 84 billion euros and 87 billion euros. BASF Group's EBIT before special items is expected to fall to between 4.8 billion euros and 5.4 billion euros.

BASF has clarified the European cost reduction plan and the structural adjustment measures of the Ludwigshafen integrated base. By the end of 2024, the cost reduction plan will save more than 500 million euros per year.

The cost reduction plan, to be implemented from 2023 to 2024, will focus on rationalizing BASF's cost structure in Europe, especially in Germany, in response to changing framework conditions. After the overall plan is completed, it is expected to reduce the cost of more than 500 million euros per year in non-production areas, namely services, operations, R&D departments and corporate centers, of which more than half will come from the Ludwigshafen integrated base.

The specific measures of the plan will include continuous integration of services into shared service centers, simplification of departmental management structures, rational adjustment of business service scope and improvement of the efficiency of research and development activities. Globally, the measures are expected to have a net impact of around 2,600 jobs. This figure also includes the creation of new jobs, especially in shared service centres.

In addition to the cost reduction plan, BASF has also started to make structural adjustments to the integrated base in Ludwigshafen. 10% of the asset replacement value of the base and about 700 production-related jobs will be affected by the integrated structural adjustment.

Closure of the caprolactam plant, one of the two ammonia plants and related by-product facilities: BASF's caprolactam plant in Antwerp, Belgium, has sufficient capacity to meet future market demand in Europe.

Cut adipic acid production capacity and close cyclohexanol, cyclohexanone and sodium carbonate plants: the joint venture with Domo, located in Charappe, France, will continue to maintain the production of adipic acid, with sufficient capacity to cope with the current changing market environment supply European business. BASF will continue to operate its polyamide 6.6 production units in Ludwigshafen, which require adipic acid as a precursor.

Closure of TDI units and precursor units of DNT and TDA: Demand for TDI was very weak, especially in EMEA, much lower than expected. The TDI complex in Ludwigshafen was underutilized and fell short of expectations in terms of economic performance. This situation is further exacerbated by the dramatic increase in the cost of energy and utility services. Relying on its global production network in Geismar, Louisiana, USA, Yeosu, South Korea, and Shanghai, China, BASF will continue to provide European customers with reliable TDI products.