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BASF Plans Strategic Expansion of its Global EPS Business with Focus on Core Markets

SpecialChem / Sep 19, 2012

LUDWIGSHAFEN, Germany -- In light of high overcapacities and low margins in some regions, BASF is focusing on its global Styropor® (EPS: expandable polystyrene) activities on strategic markets and core products with better profitability.

"These measures are part of BASF's global strategy to foster value-oriented growth and will ensure that we remain competitive in markets where we add long-term value both to our customers' businesses and to BASF," said Wolfgang Hapke, President of BASF's Performance Polymers Division.

BASF will shut down the Styropor® plants at its sites in Pasir Gudang, Malaysia and Thane, India. The plan is to stop production by the end of the year. Currently a total of 60 and 55 employees work with EPS at Pasir Gudang and Thane, respectively. The combined annual EPS production capacity of the two plants is more than 100,000 metric tons. BASF will work with employees affected by the shutdowns to find the right transition plan.

"The closure of BASF's Styropor® plants in Malaysia and India has become inevitable due to the high EPS overcapacities in Asia Pacific that have developed in recent years. These overcapacities have led to extremely low margins which make our operations in India and Malaysia uneconomic," explained Giorgio Greening, Head of the Global Business Unit Foams.

In South America, BASF is preparing strategic steps. BASF has started the preparation of a carve-out of the Styropor® business and production at its sites in Argentina and Brazil. In Chile, BASF is evaluating strategic options for the EPS business and is preparing a divestment of Aislapol, BASF's EPS foam parts producer. The Styropor® business in South America has around 80 employees and an annual production capacity of 83,500 metric tons. Aislapol has around 175 employees.

"Globally, we are focusing our EPS investments on Neopor®. The carve-out of the Styropor® business in Brazil and Argentina will help us to be flexible with regards to future strategic options. For the Styropor® business in Chile the strategic evaluation is still underway. For Aislapol the best option is to find a strategic investor who is committed to the EPS foaming business," Greening added.

Due to its properties as packaging material and its cost-efficient insulation performance, EPS is a product that has been widely accepted in various applications for several decades and still is enjoying growth rates similar to that of GDP.

BASF will focus its global Styropor® activities on core markets and will further push the growth with Neopor®, the silver-gray colored product with improved insulation properties, enhanced by its graphite content. It contributes significantly to energy efficiency in buildings and houses while reducing CO2 emissions. Neopor®, which is produced at BASF sites in South Korea and Germany, plays a key role in BASF's strategy to focus on profitable markets and products.

About BASF

BASF is one of the world's leading chemical companies. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. It combines economic success, social responsibility and environmental protection. Through science and innovation it enables its customers in almost all industries to meet the current and future needs of society. Its products and system solutions contribute to conserving resources, ensuring healthy food and nutrition and helping to improve the quality of life. It has summed up this contribution in our corporate purpose: It creates chemistry for a sustainable future. BASF posted sales of about €73.5 billion in 2011 and had more than 111,000 employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN).

Source: BASF


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