Goals for the Ludwigshafen site
Please note
The audited BASF Report will be published on March 21, 2025. The key financial figures published here are therefore to be regarded as preliminary. From today's perspective, no adjustments are expected.
The content of this section is not part of the statutory audit of the annual financial statements but has undergone a separate limited assurance by our auditor.
The content of this section is voluntary, unaudited information, which was critically read by the auditor.
Low market growth rates in Europe, a slow recovery in demand, higher gas prices than in other regions and ongoing bureaucratic hurdles have significantly burdened the European chemical industry in recent years. This has affected the Ludwigshafen site in Germany in particular, where production output and profitability have declined considerably.
As part of our new corporate strategy, we have therefore also addressed the development of a medium- to long-term vision for the Ludwigshafen site that takes into account the major challenges BASF is facing in Europe and Ludwigshafen in particular. In addition to short-term cost reduction measures, it addresses the expected future market and business development in Europe and Germany, particularly with regard to the sustainability-driven transformation, as well as a clear strategic direction for the further development of the site. The cost savings measures we have already communicated are contributing to this.
The starting point for developing the range of objectives was an in-depth analysis of our Verbund structures. This revealed that, on the one hand, all key value chains and the majority of our plants are competitive at their core. On the other hand, BASF can benefit from the dynamics of change in the context of green transformation. The integrated Verbund system at the Ludwigshafen site allows us to use energy and resources efficiently. Due to the numerous entry points, we can exchange raw materials in a targeted manner and, for example, use renewable and recycled raw materials in existing plants in a flexible and scalable way. This ensures that we can supply customers with solutions to enable their green transformation.
However, there are also plants that are already no longer competitive or are at risk of losing competitiveness in the medium to long term. An initial package of measures aimed at further adapting production structures at the site has already been announced and partially implemented. Examples are the closures of the plants for adipic acid, cyclododecanon and cyclopentanon that were announced at the end of August 2024.
BASF will also use an additional bundle of measures to adjust its nonproduction structures in Ludwigshafen and to significantly cut costs. This cost savings program is an addition to the package of measures focusing on Europe and particularly on Germany from February 2023, with which BASF aims to achieve around €1.1 billion in cost savings by the end of 2026. Total annual savings of more than €2.1 billion are expected from the end of 2026. This will make the Ludwigshafen site leaner, stronger and more competitive. Our goal is to enable Ludwigshafen to operate successfully in the medium to long term as a leading, sustainable chemical site for Europe with an improved competitive position on the European market.
These contents fulfill the disclosure requirements of the European Sustainability Reporting Standards (ESRS).