BASF to stop agro-chem production at Thane unit

MUMBAI: BASF India, the local unit of the German chemical major, has decided to close down production of some agrochemical products at Thane, as part of a restructuring exercise to make its unit more competitive.

BASF said it is discontinuing production of some agrochemical products due to rationalisation measures and that the unit will continue to operate for products such as expandable polystyrene, dispersions, leather chemicals and auxiliaries and textile chemicals.

BASF India said the move is to make the company more competitive. “The agrochemicals market in India is highly competitive,” said chairman Prasad Chandran. “The need of the day is new chemistry, which is affordable.

BASF’s strategy is based on innovation,” he added. The company said it will continue to supply its high quality brands through toll manufacturing, a process which allows other companies to make its products. “Access to international manufacturing sites in Asia Pacific also serves as a good backup,” BASF India said, adding that the move gives the company more flexibility to introduce new chemicals in India.

When contacted, a spokesperson denied that stopping production of these products would have a negative impact on the financials or on its customers. However, BASF India is expected to initiate a VRS (voluntary retirement scheme) for some of its employees at Thane, while some employees are expected to be transferred to other units. The company declined to specify other details of the VRS offer. BASF India has more than 1,200 employees.

The Indian unit posted a revenue growth of about 3.6% at Rs 683 crore in the past fiscal year, according to information posted on the Bombay Stock Exchange. Its parent company posted a revenue growth of 14% in the past fiscal year at 42.75 billion euros.

The parent company recently said that the Thane unit has been identified as an ideal location to host BASF’s Asia Technical Centre for Textiles. The parent company expects to generate annual sales of 4 billion euros by ’10 from new or improved products.

To optimise the overall utilisation of the Thane site, the polyurethanes business has set up a system house to tap the huge market potential of this segment.Shares of BASF India surged 4.5% to Rs 240.35 on the BSE on Monday. The stock has been flat in the past one month.