The past week has seen two chemical industry giants, BASF and Saudi Basic Industries Corp., or Sabic, paint a grim picture of the sector's current state.
BASF announced additional job cuts at its Ludwigshafen, Germany, site, while Sabic issued a stark warning, citing "considerable uncertainty" in the industry, following its full-year loss report on February 27.
BASF is set to implement another round of cost-savings reductions at its Ludwigshafen operations.
The move is in response to rising energy prices, declining demand and lower margins, the company said.
“On the one hand, this situation demonstrates the high competitiveness and health of BASF Group under challenging conditions at the global level. On the other hand, the negative earnings at our Ludwigshafen site show the urgent need for further decisive actions here to enhance our competitiveness.”
Last year, BASF announced plans to cut 2,600 jobs across Europe and close several plants at its Ludwigshafen site.
The company is looking to reduce costs by another €1 billion ($1.1 billion) at the site annually by the end of 2026.
The cost-saving measures, spanning production and non-production areas, aim to
Meanwhile, several news outlets, including Bloomberg, reported that Sabic ,missed analysts’ expectations a profitable 2023, instead posting a net loss of 2.77 billion riyals ($739 million) for the year.
Sabic CEO Abdulrahman Al-Fageeh said “the petrochemical industry navigates a challenging operating environment,” according to a Feb. 27 Bloomberg report.
He further stated that “underwhelming demand within our target market led to lower year-end product prices.”
Sabic attributed the annual loss, it’s first since 1996, to discontinued operations after divesting its steel unit and slow market demand, Bloomberg reported.