BASF looks to Asia - Ludwigshafen under pressure

Ludwigshafen (dpa) - The world's largest chemical company BASF believes it is prepared for US President Donald Trump's tariff policy. The tariffs are causing uncertainty in the industry and the markets, said CEO Markus Kamieth at the online Annual Shareholders' Meeting of the DAX-listed company. "But BASF is prepared."

The company is active in all important regions and produces locally for the local markets. "This has always been an advantage for BASF. But especially in these times," emphasized the manager, who took over the helm at the Ludwigshafen-based DAX-listed company a year ago.

BASF produces in the USA

"We generate more than 80 percent of our turnover in the USA with products that we manufacture there," reported Kamieth. The proportion is similarly high in Asia - and even higher in Europe. Nevertheless, the effects of the US tariff policy on demand and global trade flows are currently difficult to assess.

Kamieth named Asia as the market of the future for BASF. "Asia is and will remain the growth driver for the chemical industry." The focus is primarily on China: "We want to continue to grow with the market in China. Our new Verbund site in Zhanjiang is the basis for this."

Strong focus on Asia - despite criticism

BASF is investing billions in Zhanjiang in the southern Chinese province of Guangdong. Critics have long warned that the company is once again making itself dependent on an autocratic regime after expensive write-offs in Russia. At the Annual General Meeting, shareholder activists also warned against excessive dependence on China.

Weak growth expected in Europe and North America

In addition to China, the chemical group is focusing more strongly on India, Indonesia, Malaysia, Singapore, Thailand and Vietnam, said Kamieth. "These seven countries will account for around 80 percent of global chemical growth by 2035." In Europe and North America, on the other hand, the company expects only weak to moderate growth for the chemical industry. In these markets, BASF is focusing on utilizing existing capacities.

The chemical giant is running cost-cutting programs worth billions. The main plant in Ludwigshafen in particular is to become more profitable and competitive. The CEO assured shareholders that the site will remain a strong pillar and will become a leading and sustainable location within the Group. The savings programs are making good progress.

First quarter weaker - outlook unchanged

BASF recorded declines in sales and profits at the start of the current year. In the first quarter, sales fell slightly by 0.9 percent to 17.4 billion euros. Adjusted for special items, operating earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) fell by 3.2 percent to 2.6 billion euros.

The bottom line was a profit of 808 million euros, compared to just under 1.4 billion euros a year earlier. The management confirmed its targets for 2025: earnings before interest, taxes, depreciation and amortization (EBITDA) and special items are expected to be between 8.0 billion and 8.4 billion euros. BASF management did not provide a forecast for sales and profit after tax.

BASF has set itself the goal of saving 2.1 billion euros a year by the end of 2026. The dividend for shareholders will also be lower due to the cost-cutting measures: A dividend of 2.25 euros per share was approved at the Annual General Meeting. BASF had still paid 3.40 euros per share for 2023.

No decision on future Annual General Meetings

Kamieth and the Chairman of the Supervisory Board, Kurt Bock, announced that BASF will decide each year whether the Annual General Meeting will be held in person or online. He could imagine an alternating format, said Kamieth.