BASF SE (BAS), the world’s biggest chemical maker, is dissolving its plastics division and splitting the operations into consumer and commodity lines to help market tailored products to automotive or apparel customers.
The revamp will reduce the number of segments that report earnings to five from six, and the number of business units will fall to 14 from 15, Ludwigshafen, Germany-based BASF said in an statement today. The new organization will be reflected in first-quarter earnings published on April 26.
The reorganization illustrates which operations Chief Executive Officer Kurt Bock considers to be higher-margin specialties and which are commodities driven by costs. Engineering plastics, lightweight alternatives to metal car parts, and some polyurethane products will join catalysts and coatings, combining into one segment products sold to the auto, construction and electronics industries.
“In the new organization, the bundling of product groups with the same business model will help management to better focus on the success factors necessary to be a market leader,” Bock said in the statement.
The production of MDI, used to make polymers in refrigerators and shoes, and TDI, used in foams and adhesives, will be moved to the chemicals segment, whereas the mixing of those products will go to the specialty division. The chemicals segment relies on low-cost processes as well as lower raw- material and logistic expenses to remain competitive, the company said.
The new unit combining the more specialty plastics will be called performance materials and will be headed by Raimar Jahn, BASF said. It will come under the umbrella of a renamed segment for functional materials and solutions. The commodity plastics activities will join inorganic chemicals in a newly created monomers unit, managed by Stefano Pigozzi.
BASF is not changing its oil and gas unit or its agricultural chemicals operations which include pesticides and fungicides, the German company said.
BASF named Wolfgang Hapke, 56, head of human resources as of March 1, BASF said in a separate statement today. He will replace Hans-Carsten Hansen, who will concentrate on his mandate to the German Employers’ Federation of the Chemical Industry, BAVC.
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