German chemical producer BASF said Wednesday it will pursue a broad optimization initiative designed to lower net cash fixed costs for its core businesses by up to 20% by 2029. The company framed the effort as a fundamental change to how it operates, with significant implications for its organizational footprint.
In remarks to the Handelsblatt newspaper, Chief Executive Markus Kamieth said the program is likely to lead to job cuts. He characterized the move as one of BASF's largest optimization programs and described it as a new operating system that will deliver a leaner core business with fewer employees.
Separately, BASF announced it has signed an agreement to sell its silicates business to U.S.-based PQ, which is headquartered in Malvern, Pennsylvania. The parties have agreed not to disclose the financial details of the transaction. PQ will acquire the sodium silicates business as well as the associated activities located at BASF's Duesseldorf/Holthausen site. BASF said the deal is expected to be completed in the second half of 2026.
The company made clear that the optimization program and the divestment are part of a broader effort to reshape the core business. Management language emphasized a structural reset - a change in operating model that aims to lower ongoing fixed costs and concentrate resources on the company's core activities.
Operational note - BASF quantified the target for the program as up to a 20% reduction in net cash fixed costs for core businesses by 2029. The announcement did not include further breakdowns of which cost lines will be affected or specify the number of roles that may be reduced.
Transaction note - The agreement with PQ covers the sodium silicates operations at the Duesseldorf/Holthausen site. The timeline for closing is stated as the second half of 2026, and the financial terms will remain confidential between the parties.
Implications and context
The moves announced on Wednesday point to a twin strategy of cost containment and portfolio simplification. The declared cost target and the silicates sale together suggest BASF is prioritizing a reduced fixed-cost base alongside selective disposals of non-core or specialised assets. The company signalled that the optimization will affect workforce levels, while the sale transfers a specific product line and site activities to PQ.
At this stage BASF has provided clear targets and a timetable for the silicates transaction, but additional operational details and the financial impact will depend on implementation and are not disclosed.