March 30, 2007

 

BASF ceases lysine business

 

 

BASF announced Mar 30 that it is discontinuing its lysine business as part of ongoing restructuring of the company's fine chemicals division.

 

The company confirmed in a press release plans to shut down its production facility in Gunsan, South Korea, by the middle of this year.

 

Lysine is the only amino acid in BASF's nutrition portfolio. The shut-down signals a shift in focus towards "a more cyclically resilient portfolio".

 

This closure is the latest in a slew of efforts, beginning in January 2006, to consolidate its fine chemicals business.

 

By concentrating on the production and marketing of essential non-amino acids such as vitamins, carotenoids, enzymes and organic acids, BASF hopes to reposition itself within the nutrition industry, said Dr Wolfgang Buchele, president of the fine chemicals division.

 

Despite massive cost restructuring over the last three years, rising raw material costs, overcapacities and high export dependence have made production at the Gunasan site unsustainable, explained the company's press release. The lysine facility has an annual capacity of 100,000 tonnes.

 

As part of ongoing restructuring moves, BASF merged its human and animal nutrition business in a single nutrition unit last November. Last month, it sold a major part of its premix business to Netherlands-based Nutreco.

 

Worker lay-offs will be managed through employee representatives, who will negotiate with the company directly on behalf of the 80 staff at the plant.

 

Nevertheless, BASF, which started its business in South Korea in 1954 and has a local staff-strength of about 1,200 today, affirmed its ongoing commitment to its business in the country.

 

Globally, BASF has over 95,000 employees. Worldwide sales were EUR52.6 billion in 2006.