BASF (Ludwigshafen, Germany) has announced declining sales and earnings for the second quarter of 2009 due to the ongoing global economic crisis. Sales for the entire first half of 2009 amounted to €24.7 billion, which is 23% less than the first half of 2008. Second quarter sales fell by 23% to €12.5 billion.
Sales in the chemicals segment dropped by 41% due to lower volumes and prices. The company says that this is 32% lower than Q2 2008, but all divisions improved significantly compared to Q1 2009. Plastics fell by 30% due to weak demand from all industries, and the functional solutions segment declined by 30% due to weak demand in the automotive industry. Because of a sharp decline in oil prices, sales in the oil and gas segment fell by 23%.
The performance products segment increased its sales by 17% as a result of the acquisition of Ciba in April. Second quarter sales in agricultural solutions were also slightly higher than Q2 2008.
In Europe, sales fell by 26%; by 33% in North America (24% in euro terms); by 10% in South America, Africa, and the Middle East (8% in euro terms); and by 23% in Asia Pacific (15% in euro terms). However, overall demand in the Asia Pacific region rose significantly in Q2 thanks to renewed growth in China.
BASF plans to initiate extensive restructuring measures to reach the potential of a combined business with Ciba, resulting in the reduction of 3,700 positions worldwide by 2013. The company expects the restructuring to bring synergies of at least €400 million per year. Expected cash costs are approximately €550 million, with the major portion being severance costs.
For more information, visit www.basf.com.