6 Jul 2009

BASF Blitz Ciba - 3,700 jobs to go in an EU approved acquisition.

In a not too surprising move, BASF announced that it will further its own agenda and slash the newly-acquired Ciba Specialty Chemicals organisation. In the rather disjointed announcement (lost in the translation, if you want to be kind), BASF announced:

  • 23 of the sites acquired with Ciba are under review (management or poor PR speak for, 'Will be shut')
  • Synergies of at least EUR400 million per year, in other words, site closures and the planned loss of 3,700 jobs - synergies is a rater out dated word!
  • Fair and transparent decisions - a PR strip line which has no credibility whatsoever. BASF decide and you will obey! It bewilders us why large companies continue with their old fashioned PR statements - no one believes that the decisions are fair or transparent! We planned it, you do it and those we want will be employed as long as you support our decisions! Too cruel? Not according to our feedback.
Perhaps, for the paper chemicals business there are some glimmers of commitment. The centre for the business will be in Basel (a tax dodge), but feedback from the people based in Ludwigshafen is far from positive - many will not move to Switzerland and why should the heart of the business be relocated to save taxes - the EU needs to take a stand against the Swiss and support its EU members. Clariant, Hercules, BASF .......... how many more will dodge paying EU taxes?

In a straw poll of the paper industry there is a decided unease regarding the merger and a general belief now that the trend to consolidation ('one stop shop') has had its day and the opportunities for India, China and smaller companies is gaining momentum. The growth in the importation of paper chemicals into the EU bears testament to this view.

Keep posted as we gather more information regarding exactly what BASF intends to do with Ciba ............. so far the message is that they are taking a supplier out of the market. The strategy will not be easy to implement!

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