BASF India, a subsidiary of German chemical company BASF SE, has decided to discontinue the low margin Styropor business in India by the end of December.
Styropor is a raw material for producing thermocol which ultimately finds use in packaging solutions. The Asian market is currently facing oversupply. Therefore, the production of Styropor has become almost unviable.
Consequently, the company has decided to shut down the Styropor production plant located at the Thane site, Maharashtra.
The company attributed the closure of this plant to global restructuring plan for BASF‟s expandable polystyrene (white EPS) business.
"The announcement today is part of BASF‟s global strategy and will not affect our overall growth strategy in India,” said Prasad Chandran, Chairman and Managing Director, BASF India.
BASF India is a public listed entity in India in which 73.33% held by BASF SE, the parent company headquartered in Ludwigshafen, Germany, and the balance with public.
The company is evaluating all options including shifting of its 55 employees to other units and offering them voluntary retirement scheme (VRS). BASF will also work closely together with its EPS customers to ensure a smooth transition.
“We has identified India as one of the important growth markets and we will continue to invest and grow in India,” Chandran said.
In April 2012, BASF announced an investment of Rs 1,000 crore to set up an integrated chemical manufacturing hub at Dahej, Gujarat, which will house production facilities for polyurethanes, care chemicals and polymer dispersions for coatings and paper. Start of production is planned in 2014.