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BASF braces itself for global recession
Nov. 3, 2008
The German company reported a third quarter sales growth of 13 per cent, driven by record sales of crop protection products.
The group’s Agricultural Solutions division achieved sales growth of 11 per cent as a result of higher prices and increased volumes as crop protection sales soared. But despite overall sales of 15.8 billion, the company says the next year will be one of its toughest yet as the global economy sits on the brink of a recession.
Dr. Jürgen Hambrecht, chairman of the board of executive directors said: “The economic skid marks can no longer be ignored. The decline in demand in important markets, stockpiling by our customers and the fall in oil prices are all signs of a recessionary trend that is likely to sharpen in 2009.
The months ahead are likely to bring many extraordinary challenges for our business and hardly any positive impulses. We have therefore revised our assumptions and are now reckoning with global economic growth in 2008 of below 2.7 per cent and chemical production growth of below 2 per cent. “We expect an average oil price (Brent) of $105 per barrel in 2008 and an average euro/dollar exchange rate of $1.45 per euro.”
He said the uncertainty surrounding the global economy made it difficult to make predictions for the year ahead, but it would scale back production in certain products where demand is expected to fall such as in the motor industry.
He also called for help from the EU to avoid additional costs of complying with environmental targets, and claimed the emissions trading standard would make European industry less competitive. He said: “What we can all do without are additional burdens that will weaken our position compared with the global competition. I am therefore extremely worried about the EU’s current plans regarding emission trading.
“If implemented, they would result in higher additional costs, even for companies like BASF that use the best possible technologies in terms of climate protection. I would like to see an end to these systematic attempts to de-industrialize Europe.”
Source: Farmers Guardian
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