August 4, 2005

Lysine, vitamin C prices hit at BASF's profits
 

The cost of restructuring BASF's vitamin C production and freefalling lysine prices have resulted in zero profits for BASF's fine chemicals division this year.

Without these setbacks, the division could have reported a strong increase in sales and profits for the second quarter. BASF's fine chemicals' income fell to EUR1 million (US$1.23 million) for this year's first half compared with US$97.2 million for the same period the previous year.

Sale of lysine, making up the division's biggest sales volume, fell 7 percent during the second quarter. Lysine prices also dropped to US$1.48/kg, a 50 percent fall from the same period the previous year.

A US$32 million restructuring for its vitamin C production further reduced the income for its second quarter. BASF, one of two remaining vitamin C makers in Europe, was pressured by China's vitamin C producers, who sold their products for as little as US$3.45/kg in May this year, almost the lowest price for vitamin C ever.

In response to market pressure, BASF has already started streamlining its plant in Ludwigshafen, Germany. The company is expected to cut costs by US$591 million annually.