Dhe chemical group BASF does not want to take advantage of the gas price brake. It is still too early for a final decision, but the company, one of the largest industrial gas consumers in Germany, will “do everything possible to manage it on its own”, said CEO Martin Brudermüller when presenting the interim report. Every company has the responsibility to consider whether it can and must use public money. After all, the state cannot “take over every deficit” for years to come.
According to Brudermüller, the decision as to whether the company takes advantage of the aid depends on the conditions for its payment and on the development of the gas price. Above all, the possible conditions for a gas price brake have been on the minds of industry representatives since the budget committee of the Bundestag proposed that the payment – similar to the Corona aid – be linked to a limitation on bonuses and a freeze on dividends. If that were to happen, it would have significant repercussions for corporations like BASF, whose investors mainly hold the shares because of the dividend. The Gas Commission will soon present its final recommendations, after which the Economics Ministry will have to make a decision.
Brudermüller reacted with displeasure to the criticism that BASF had already announced an austerity program, although the state was offering help with the price cap to prevent job cuts. Even after the war, energy prices would be higher than they are today, he said. The world is changing and companies need to respond now. “You can’t freeze companies for a few years and then thaw them out again.”
New strategy for production in Europe
It is all the more important to design the aid in such a way that “structural changes” remain possible. To the annoyance of the chemical union IG BCE, the board has already announced an austerity program that is intended to reduce costs in Europe by half a billion euros a year – a tenth of the total costs. The administration and service functions at the Ludwigshafen headquarters, where a good 39,000 people work, are particularly affected. However, redundancies are still contractually excluded there until 2025.
In addition to the short-term savings program, Brudermüller intends to present a completely revised strategy in the first quarter in order to adapt production in Europe to the changed framework conditions. This will also significantly reduce gas consumption. According to the company, energy costs in Europe alone have increased by 2.2 billion euros in the first nine months. According to CFO Hans-Ulrich Engel, the gas price has fallen well below its peak.
In addition, the group has further reduced its gas consumption. However, as in the majority of industry, this is mainly due to reduced production. The most important factor at BASF is ammonia, an important precursor for fertilizers and Adblue. Because production in Europe is hardly worthwhile anymore, the group buys the agent on the world market and has throttled its three ammonia plants in Europe.