BASF cuts capacity as gloom persists

Posted by Trish Riley, August 14, 2009

BASF may consider this gloomy news, but I view this as a very positive upside to our economic and environmental woes. This story tells of several chemical companies reducing their production of plastics in direct response to diminished markets, thanks to consumer awareness of hazards associated with plastics. Please take note the power of information and the power of the consumer. Three Cheers!

The world’s largest chemicals maker said the closure of a polystyrene plant — part of a business it has been trying to sell for two years — will reduce BASF’s annual output capacity for the standard plastic in Europe by about 15 percent.

It had previously announced plant closures in Spain, the United States and South Korea.

BASF’s shares fell 2.5 percent to 28 euros at 0908 GMT, underperforming the European DJ Stoxx Chemicals Index .SX4P, which was down 1.9 percent.

The European chemical industry, depending on the ailing car, construction and electronics industries, is suffering from a slump in sales volumes approaching a third and is using little more than 70 percent of its output capacity.

The move comes after a Japanese daily reported in April that rival Mitsubishi Chemical Corp will exit the polystyrene and PVC businesses.

via UPDATE 1-BASF cuts capacity as gloom persists | Industries | Energy | Reuters.

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