As Martin Brudermueller heads for the door after six years in charge of BASF, he signalled the world’s largest chemical maker will be turning more inward when it comes to base chemicals in Europe.
High energy costs, low growth, and regulatory change at odds with the demands of the chemical industry, have already prompted a review of BASF’s asset base, particularly in Germany. What followed were plant shutdowns and painful cuts to the company’s flagship Ludwigshafen complex. But there’s more to come, Brudermueller warned today.
BASF wants to completely rethink its model for producing these feedstocks that have historically been the backbone of the 159 year-old company. Increasingly, the BASF’s production will be used internally. Chemical companies who have been buying BASF’s supplies to convert into commonplace downstream chemicals and materials will need to go elsewhere.
“BASF will trim it more to our own internal consumption and sell less to the market,” Brudermueller said. “You have to take into account that the base chemicals are the most CO2 intensive products. That means we produce them and sell them to the people and then we have to reduce this high cost of CO2. It doesn’t make sense anymore. We will really use that to fuel basically our chains with the raw materials.”
Today marks Brudermueller’s final shareholder meeting, long events where shareholders rake through every detail of the past year with the same rigour as a plant operator in Ludwigshafen. Hoping for a short one, Brudermueller said his one piece of advice to his successor, Markus Kamieth, is don’t get distracted by politics or the media.
Kamieth is leading a new guard working on a strategy update that should be revealed in the months ahead, Brudermueller said.
Shareholders aren’t the only ones with questions. Analysts are keen to get more clarity on BASF’s path ahead and whether its future lies in upstream or downstream. It’s never been very clear in Europe.