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Chemical industry: BASF further withdraws from Russia

Status: 04/27/2022 12:34

Chemical company BASF draws further conclusions from the war in Ukraine. The Ludwigshafen-based company has announced that it will almost completely stop its operations in Russia and Belarus.

BASF, one of the largest chemical groups in the world, will almost completely give up its activities in Russia and Belarus by the beginning of July 2022. The exceptions should be activities in support of food production. As a justification, BASF stressed that the war could lead to a global food crisis.

The group hadn’t completed any new business in Russia since March. Due to the latest developments in the war and sanctions imposed by the EU against Russia, the decision has now been made to stop existing activities in Russia and Belarus by the beginning of July, BASF announced. 684 employees are currently employed in the two countries. These will continue to be supported until the end of the year, he said.

Economically, the decision should be manageable for the group. Because according to their own statements, operations in Russia and Belarus contributed only about one percent to the group’s sales last year.

Most of it depends on oil and gas

The dependence is much stronger with regards to the stake in the oil and gas group Wintershall Dea, in which BASF currently holds about two thirds of the shares. Despite differences with the co-owner, the Letter One investment company of Russian entrepreneur Mikhail Fridman, BASF confirmed the last time at the end of February that it intends to go public.

Wintershall Dea still makes almost half of its production in Russia, but had already announced in early March that it would stop all new oil and gas production and projects in Russia and cut payments to the country.

Wintershall had already canceled the financing of the Nord Stream 2 Baltic Sea pipeline. April 29 will show how big the impact on BASF’s earnings will be, then the group will present balance sheet data for the first quarter of 2022.

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