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BASF Exits One Stream, Expands Another

Thursday, August 6, 2015

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A decline in the North American market has led German chemicals giant BASF to exit the dimer and polyamide resin business.

Meanwhile, the company says it will consolidate its pigment activities.

Dimer and Resin Production Shuttered

BASF Corp. indicated that excess market capacity and a decline in key markets contributed to a decline in the North American market over the past 15 years. This falloff prompted the decision to leave the business segment and close the dimer and resin production unit at BASF’s Kankakee, IL, location.

Photos: BASF SE

BASF has decided to leave the dimer and polyamide resin business due to a decline in the North American market, closing the Illinois production unit (not shown here).

On Friday (July 31), The Daily Journal (Kankakee) reported that 50 of the site’s 220 employees would be laid off.

According to Michael McHenry, vice president, Business Management for Dispersions & Pigments, North America, the majority of products manufactured at the Kankakee dimers and resins plant are used in industrial applications, with the balance used in printing applications. Trade names of products manufactured at Kankakee include Empol, Genamid, Versadyme, Versamid, Versamine and Versacure.

McHenry also told us this departure in the North American region will impact customers in other parts of the world if they globally source dimer or polyamide products from the Kankakee site.

In a statement, BASF reported that, through the end of this year, it will work directly with customers on affected stock materials and also assist in the transition to new suppliers. It is also evaluating the sale of intellectual property associated with the dimer and polyamide resin business.

“This decision has been difficult because it impacts employees in Kankakee and our dimer and polyamide customers,” Gerry Podesta, senior vice president for Dispersions & Pigments in North America, said in a statement. “We will take steps to ensure a smooth transition for customers and provide support to employees during this time.”  

While dimer and resin manufacturing will cease in Kankakee, the site will continue to operate to serve customers in the nutrition and health care chemicals markets. The site joined BASF Corporation with the acquisition of Cognis in 2010 and has been manufacturing products since 1948.

Pigments Activities Reorganized

BASF also announced plans to organize a new global business unit (GBU) that would combine all pigment activities.

BASF will be combining all of its pigment activities under one new global business unit, effective January 2016.

BASF’s pigments business serves a variety of industries, such as paints and coatings, printing and packaging, and plastics. The portfolio comprises color pigments such as phthalocyanines, high-performance pigments, azo pigments, effect pigments, inorganic pigments, dyes and pigment preparations.

The new pigments GBU is expected to be headquartered in Ludwigshafen, Germany, and would be in operation as of January 2016. Employees dedicated to the pigments business would be transferred to the new GBU.

BASF intends to devote the second half of the year to carving out its pigments business and establishing separate legal entities.

According to Dr. Markus Kramer, president of BASF’s Dispersions & Pigments division, “The new global business unit will fully concentrate on the pigments business and thus be even more focused on supporting the needs of our pigments customers.”

Appointed head of the GBU, Dr. Alexander Haunschild, senior vice president of the Pigments and Resins Europe regional business unit, added: “By creating an organization fully dedicated to pigments, we will adapt better to the challenges in the pigments industry. Our customers will benefit from tailored services and higher responsiveness.”

About the Company

BASF’s Dispersions & Pigments Division offers a portfolio of resins, binders, latex, pigments and effect pigments, colorants, and systems to meet specific application needs for the coatings, construction, printing and packaging, plastics and paper markets.

BASF Corp., headquartered in Florham Park, NJ, is the North American affiliate of BASF SE, Ludwigshafen, Germany. BASF has more than 17,000 employees in North America, and had sales of $20.6 billion in 2014.

   

Tagged categories: Asia Pacific; BASF; Business matters; Business operations; EMEA (Europe, Middle East and Africa); Latin America; North America; Pigments; Program/Project Management; Resins

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