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BASF SE, the world"s leading chemical producer, will temporarily close 80 plants and downsize production at another 100 plants worldwide, following a profit plunge. The decision will affect 20,000 employees, including 5,000 in the company"s home town of Ludwigshafen. BASF officials said measures were being taken to avoid overcapacity in a period of massive decreases in demand. BASF"s customers are in the auto industry, construction and fabrics, which have severely reduced their orders because of the global economic crisis.
BASF has estimated that the EBIT in 2008 will be lower than in 2007, despite previous statements that they will make every effort to match the year 2007 results. The operating profit target was 7.61 billion EUR (9.6 billion USD) reported in 2007. Analysts were not expecting that BASF would take such measures and are predicting massive chain reactions for all companies in or depending on the chemical industry.
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