BASF review strategic options for leather business5 February 2009
BASF are taking steps to optimise their structures in order to sharpen the company's focus on customer industries, effective as of April 1, 2009. Dr John Feldmann, member of the board of executive directors responsible for the Performance Products segment, explained the benefits of the changes: ‘With these initial steps, we are very clearly focusing our business on the needs of our customers and markets and sharpening the profile of the segment's divisions.'
In the future, the Performance Chemicals division will primarily offer innovative and specific solutions for a broad range of industries including plastics processing, automotive, refineries, oil fields and mining, as well as leather and textiles.
BASF are also reviewing strategic options for leather and textile chemicals. The leather and textile chemicals business also forms part of the activities of the current Performance Chemicals division. For several years, this business has been characterised by low market growth and high competitive pressure. In order to improve competitiveness, BASF have implemented a series of restructuring and efficiency programmes in the past years. However, these measures have not been sufficient to ensure the long-term profitability of the business.
Hans W Reiners, head of the Performance Chemicals division, said: ‘Our employees have worked hard to improve the business in recent years. In view of the difficult market situation, the results are not sufficient to ensure long-term success with our own means.' The business unit has, therefore, introduced an additional programme to increase efficiency, which is expected to reduce costs by €25 million by 2011.
In addition to implementing this cost-reduction programme, BASF are reviewing future strategic options. In particular, these include the formation of a joint venture or the complete sale of the business. ‘The market requires this step not just because of the fragmented supplier structure and the low market growth', said Reiners.
BASF operate production plants for leather and textile chemicals in Germany, Spain and Turkey, as well as in Brazil, India and China. The business, which employs approximately 1,300 people, posted global sales of about €400 million in 2007. Leather and textile chemicals include products and concepts for weaving, pretreatment, optical brightening, analog and digital printing, coating and finishing, as well as dyeing auxiliaries in addition to chemicals for all wet-end and finishing processes in the leather and fur industries.