BASF to cut jobs at Minden site

BASF PharmaChemikalien is to reorganise and downscale its Minden, Germany production site as a means of countering the greatly intensified competition involving a wide variety of pharmaceutical active ingredients.

The restructuring programme, aimed at increasing efficiency and competitiveness, will involve the loss of approximately 200 full-time jobs. The redundancies will happen mainly through dismissal due to operational reasons, and will be completed by mid-2007.

The outsourcing of service functions is being considered by the company.

'The decision to streamline the workforce was not easy for us. However, it is necessary if we are to make the site profitable again and safeguard the remaining jobs', said Dr Roland Minges, managing director of BASF PharmaChemikalien.

'We shall immediately start discussions with the employee representatives aimed at reaching a compromise and devising a redundancy plan. We shall also examine employment options at neighbouring BASF Group companies for members of staff leaving,' Minges added.

The increased cost pressure by suppliers from Asia has led to an unsustainable situation in earnings, says BASF, and this was exacerbated by a significant decline in demand for essential active ingredients produced at the Minden site.

Restrictions in marketing pseudoephedrine in the world's largest market - the USA - as well as huge volatility in the demand for caffeine among the beverage sector, are making it impossible to operate the plants profitably in Minden and employ a workforce of the current size.

BASF will focus its attention in the future on the growth areas of pharmaceutical excipients and custom synthesis in the Pharma Solutions business segment.

Around 520 employees currently work at the Minden site. The key sources of revenue are pharmaceutical active ingredients such as pseudoephedrine, theophylline, and caffeine.