BASF to close 80 plants worldwide, lay off 20,000 workers

Chemicals company BASF said it is temporarily closing 80 plants worldwide due to ''massive decline in demand in key industries.'' The world's largest chemical company also said it is cutting production at 100 more units, and laying off around 20,000 workers.

BASF said the measures are meant to avoid the creation of overcapacities as a result of a massive decline in demand. The company has already announced closure of its polystyrene and caprolactam, advancing a scheduled maintenance work.

''We already drew attention to the difficult economic situation at the end of October. Since then, customer demand in key markets has declined significantly,'' said Jürgen Hambrecht, chairman of the board of executive directors of BASF SE. ''In particular, customers in the automotive industry have canceled orders at short notice,'' he added.

In addition, BASF said its sales volumes are being negatively impacted by increased reduction of inventory by customers and a lack of credit in customer industries.

''In 2008, BASF will therefore not achieve the previous year's excellent EBIT before special items. How the coming year will develop is difficult to foresee. BASF is preparing for tough times,'' said Hambrecht.

Worldwide, approximately 20,000 employees will be affected by the production cuts. Flexible working time arrangements will be used wherever possible, the company said in release.