Gas prices have come down in Europe, but the fuel is still more expensive than in the Middle East and the US. The German government does not listen to industry representatives and for 30 years before that all Germans benefited from cheap Russian gas. BASF CEO Martin Brudermüller said this in an interview with Handelsblatt.
BASF CEO Martin Brudermüller has served 18 years on the board of directors of the world’s largest chemical company and plans to step down this year. He told Handelsblatt that Germany no longer looks like an attractive place to do business, but the government is holding out hope. Case in point – four business associations have called on Chancellor Olaf Scholz to take urgent action, and they described his response as, “All proposals keep bouncing off the chancellor.”
“Germany is still not utilising its potential,” said Martin Brudermüller. – ‘We need a major leap forward in industrial policy that will make the country ready for the future’.”
The world’s largest chemical company depends heavily on gas prices. They have fallen recently, but according to the BASF chief, prices are still higher than in the US and the Middle East.
There have been accusations in the West that Germany has relied heavily on Russian gas. But Martin Brudermüller doesn’t think this was a mistake.
“In hindsight, it’s always easy to think that you know exactly what will be best. After the Cold War, everyone thought that bringing Russia back into the European fold was the right strategy – including economically. And everyone benefited from cheap gas for 30 years: the country, the economy, households.”
The head of BASF admitted that the concern also benefited from such co-operation.
“And everyone in Germany was happy that BASF entered projects in Russia, broke the monopoly of Ruhrgas and prices fell significantly. Without that, we would not have the current prosperity,” said Martin Brudermüller. – But everyone can and should ask themselves: Should we not have reacted very differently to the situation with Crimea in 2014? But this question is beyond the remit of BASF and economics.”
BASF informed that all divisions except the main site in Germany showed strong results in 2023.
“Profit in Germany suffered due to a significant negative result at the largest production site in Ludwigshafen. There are two main reasons for this. Temporarily weak demand is having a negative impact on volume growth in both upstream and downstream businesses. In addition, higher production costs due to higher energy prices are having a negative impact,” the group reported.
The company once again confirmed that it will continue to optimise and reduce production in Ludwigshafen. “Unfortunately, the programme will also involve further job cuts,” said CEO Martin Brudermüller.
BASF plans to win €1.1bn in savings in Germany by 2026. The concern expects global chemical production to grow in 2024, but at the expense of China, where BASF continues to build its plants.
Germany has not received Russian gas since the end of August 2022. Previously, German companies received fuel at one of the most favourable prices in the EU due to joint projects, including in Russia. This allowed German companies to maintain their competitiveness at a high level.
1,932 total views, 4 views today
