Significant Events
Following extensive review, BASF announced in July 2022 that final approval had been granted for the construction of the planned Verbund site in Zhanjiang in the southern Chinese province of Guangdong. The project remains on schedule. After the first plant for the production of engineering plastics started operation in early September, the heart of the Verbund is now being constructed. This includes a steam cracker and several downstream plants for the production of petrochemicals and intermediates, among others.
On September 30, 2022, BASF closed the divestiture of its kaolin minerals business to KaMin LLC./CADAM S.A., a global performance minerals company headquartered in Macon, Georgia, following the approval of the relevant authorities. The divestiture comprised the production hub with sites in Daveyville, Toddville, Edgar, Gordon and related mines, reserves and mills in Toomsboro and Sandersville in Georgia. The refinery catalysts operations located at the same site were not part of the divestiture. Until the divestiture, the kaolin minerals business was part of the Performance Chemicals division and had approximately 440 employees in North America, Europe and Asia. The disposal price was around €220 million on a debt-free basis and excluding current assets not transferred.
Both Nord Stream 1 pipelines were damaged in September 2022, with the result that Nord Stream 1 is currently not operational. The pipelines are owned and operated by Nord Stream AG, in which BASF holds an indirect 15.5% interest via Wintershall Dea AG. The extent of the damage, options for and the extent of repairs, insurance coverage and effects on existing gas transportation agreements are currently being investigated. Based on the information currently available and using various scenarios, which also took into account the political situation, an impairment loss of around €740 million was recognized on Wintershall Dea’s interest in Nord Stream AG in the third quarter.
Against the background of significantly weaker earnings in Europe – especially in Germany – as well as the deteriorating framework conditions in the region, BASF has initiated a cost savings program focusing on Europe and particularly Germany to be implemented from 2023 to 2024. Cost savings that are possible in the short term will be implemented immediately. Upon completion, the program is expected to generate annual cost savings of €500 million in non-production areas. More than half of the cost savings are to be realized at the Ludwigshafen site in Germany.
On October 20, 2022, the Supervisory Board of BASF SE extended the appointment of Dr. Martin Brudermüller (61) as BASF’s Chairman of the Board of Executive Directors until the end of the 2024 Annual Shareholders’ Meeting; Brudermüller’s appointment was originally scheduled to end in 2023. Brudermüller has been Chairman of the Board of Executive Directors of BASF SE since 2018 and a Board member since 2006. In addition, the Supervisory Board has appointed Dr. Dirk Elvermann (51) as the new Chief Financial Officer and Chief Digital Officer. He succeeds Dr. Hans-Ulrich Engel (63), whose mandate ends at the closing of the 2023 Annual Shareholders’ Meeting. Engel has been a member of the Board of Executive Directors since 2008, Chief Financial Officer of BASF SE since 2011 and also, since 2018, Vice Chairman of the Board of Executive Directors. Elvermann has been with the company since 2003 and has led the Corporate Finance division since 2019.