BASF shifts focus from Europe due to high energy costs

Cost cuts coming in Europe and likely to be permanent. Later report says most will be done by attrition. Retiring workers won’t be replaced. Surplus workers will be moved into their positions.

“The cutbacks at home contrast with a 10 billion euro chemical complex that BASF plans to build in Zhanjiang, southern China, to run entirely on renewable energy, as it banks on booming Asian markets and looks to reduce reliance on Europe.”


Supply side econ in central Europe.

Building a plant in China is good for business. Centering your business in China puts you under Xi’s rules while the Chinese government will give water and fuel to Chinese corporations first.

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German GDP fell by 0.4% in the final three months of 2022, according to data published on Friday by the country’s Federal Statistics Office. “Continuing large price increases and the ongoing energy crisis had a negative effect on the German economy towards the end of the year,” the office said…

“Europe’s competitiveness is increasingly suffering from overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors,” said Martin Brudermüller, the BASF chief executive.


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So has said every “JC”, about every location in the world, forever.



Traditionally the industrial revolution in Europe was based on coal. They adopted oil from the Mideast around WWI. Natural gas became available from North Sea post WWII.

Chemical companies rely on low cost raw materials and energy. Rising costs force a realignment in Europe. Companies must invest elsewhere to survive. Jobs in Europe require being creative. Autos and EVs seem to be growing. Green energy. Maybe semiconductors. Software? What else?

The adjustment will be painful for many. But times changes. Its not new. Workers are forced to adapt.

in reality is suffering from poorer allocations, ie a brewery in every German town. The same crowd did not understand that the first time I wrote it.

Actually Germany is doing well except for capital management.

It’s at least 2500 years old when an Egyptian leader complained that he couldn’t make enough bricks for his building projects without the foreign slaves he was using.



Germany benefited from the Prussian education policy of universal education and creating their apprenticeship program in 1815–before everyone else in Europe.

Justus von Liebig created the first chemistry research school at Geissen in the 1820s. That contributed to Germany taking over the synthetic dye industry which then led to the drug industry. All that from coal. And lots of new technology.

Its no surprise that Germany is the leader in the chemical industry. But now it will be high margin chemicals meaning many big volume chemicals will be made elsewhere and imported.


Not all regulatory and bureaucracies are created equal. Don’t be surprised to see BASF units start migrating out of Europe.


The problem is the people that moan and cry about this all day long only cherry pick one or two things if asked for specifics. Most regs are very important because businessmen do not give a damn if someone dies only if they make some money…uh oh now the real crying may begin.

That’s a bit strong. Many businesses try to be good citizens and socially responsible. But yes businesses exist to make money. And investors reward the best performers with higher share prices.

Sorry it is inherited and inherent than we are destroying everything before us for the bottom line ONLY dependent on the competition. Meaning if they go cheap we need to go cheaper.

Businesspeople have a massive history of being completely untrustworthy. The cries for deregulation are to do the damnedest to be cheap all over again. At some point ponying up instead of creating terrible waste and often terrible products needs to be rectified. Very few business people see to doing that.

Do I believe business people are good people? Yes. Do I believe business people will often do a lot of wrong? Absolutely and there is very little to actually dispute that.

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Absolutely then they face often the reality that their product and the need to compete eliminates that “try” very quickly.

Some go out of their way to be good citizens and truly do succeed. That was a long time coming.

There is a whole spectrum of businesses out there from terrible to excellent by what ever yard stick you choose. Lets not paint them all with one brush.

Successful businesses often find being socially responsible good public relations. The smoke belching factory may be profitable but tends to accumulate enemies who wish it would go away. Public opinion does matter (in a democracy).

Taking care of the details is good business. You ignore these requirements at your own peril.

Of course when those profits are at risk, choices must be made.


As it happens, I voted my J&J proxy a couple days ago. As we know, they have a huge PR problem with their talc products. I could not help but notice all the blather in their annual report about “diversity” and “inclusion”. “Human capital management” they call it. Sounds wokie, and, in some states, wokieness is now a crime. In some states, it seems that now, being a rapacious, mass polluter, is a good thing, because it proves your aren’t a wokie.



You are missing the point. I am tarring the first voices against regulating. Those voices want it cheap and dirty, “I gots my rights to poison your well next door. I need to build these widgets cheaper. Your child did not die of cancer because of those chemicals I used”. I am tarring them. I have said other things like Steve just quoted above.

I hear you. Tar is sometimes deserved but not always.

Of course when speaking of German chemical companies, they are often tarred for support of the German war effort in World War II and use of slave labor during the war. But that was a long time ago. They were part of IG Farben.

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At this point it is important to go beyond just not using the chemicals into doing the right thing and meaning it.

The first guy crying about regs is ignoring at best the cancer victims down stream. I do not owe anyone a pass in this discussion. There are things more important such as human life than petty semantics.

In another thread we are discussing lead and cadmium discovered in Hersey’s chocolate.

Chemistry is the basic materials science. All materials can be regarded as chemicals and obey chemical laws.

They are all around us all the time. Toxics present in trace amounts are likely. Somehow we have survived anyway.

Chemicals have a bad reputation. That’s unfortunate. Like it or not chemicals are everywhere.


You are obfuscating. You know what I mean. It has nothing to do with endless discussions here. Carcinogens are carcinogens. You can not sweep that under the table at this point. There are massive liabilities involved.

Bottom line you know exactly what I am talking about. I fail to see why you are not acknowledging it. Fail to see why you would point to oxygen or any other thing like a protein when that is not the discussion and you know it.

You would argue to throw a man found guilty of murder in prison but making an extra buck when children die downstream you are mixing up all sorts of things. Not your intent but perhaps you have not studied Environmental Economics. It is a very old long list of dangerous chemicals where the bottom line of companies ignore anything to do with the deaths from their use in manufacturing. Particularly younger children are affected.

I could careless about the stigma of the word chemicals. No one here is out of touch that life is made up of chemicals. You are not out of touch that some chemicals are dangerous and added anyway.

This is like that famous line, “trust me”. You know whoever says that can not be trusted. Anyone complaining about regs does not care who gets killed downstream. It is blood simple.