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BASF to idle two steam crackers at Ludwigshafen site
26
Mar '09
BASF will idle the smaller of its two steam crackers at its site in Ludwigshafen due to continuing weak demand. The temporary shutdown of the cracker, which has an annual capacity of 220,000 metric tons of ethylene, is planned for the middle of April and will last at least three months. Overall, a total of five production lines are currently idled at the Ludwigshafen Verbund site, and an additional 60 production lines are operating at very low capacity utilization rates. BASF has reduced its production capacities worldwide by more than 25 percent.

"Demand from key internal customers in our Production Verbund has unfortunately remained low over the past weeks," said Dr. Albert Heuser, President of BASF's Petrochemicals division. "We do not expect any improvement in the foreseeable future, for example for production lines that serve the automotive industry. We are therefore tailoring production to reflect demand and to reduce costs."

The employees from the steam cracker can be transferred to other production plants at the site for the time being. Since first implementing capacity reductions in November, BASF has been using flexible working time arrangements wherever possible, which also includes transferring employees between plants with varying capacity utilization rates.

"We are using the strategic advantages offered by the size and flexibility of our integrated Verbund sites," explained Dr. Bernhard Nick, manager of the Ludwigshafen site. "At the moment more than 500 employees are already working temporarily in other plants. This is the main reason why we have so far been able to avoid short-time working here in Ludwigshafen. However, this possibility will soon be exhausted if the situation does not improve." In January, the company's management reached a provisional agreement with employee representatives that will allow the rapid introduction of short-time working in Ludwigshafen if necessary.

The steam cracker uses steam to "crack" naphtha at a temperature of about 850°C. Among other products, this produces ethylene and propylene - important basic chemicals used to product many BASF products such as plastics or raw materials for paint.

BASF

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