BASF to Dissolve Paper Chemicals Division, Redistribute Assets

BASF will dissolve its paper chemicals division from Jan. 1, 2015 and spread its products and activities across other divisions of the Performance Products segment, where they fit well with other businesses.

Some 50 jobs will be eliminated in the move, which also foresees the division's headquarters at Basel, Switzerland, which also has responsibility for the paper coatings and additives operation, being closed at the end of 2014.

Group sales with paper chemicals totaled €1.44 billion in 2013.

The German chemical giant is a global supplier of paper chemicals, but profitability of a number of the businesses - some of which it picked up with the acquisition of Switzerland's Ciba in 2009 - has lagged, and attempts to find a buyer did not meet with the desired response.

Plans call for the wet-end chemicals and kaolin businesses to be integrated into the Performance Chemicals division, supplementing the polyacrylamide value chain. Within the division, a new global business unit "Paper Chemicals" is to be established.

BASF said it is "evaluating strategic options for the paper hydrous kaolin business."

The paper dispersions business and the Center for Sustainable Paper Packaging (CSPP) are to be integrated into the Dispersions & Pigments division, supplementing the latex dispersions value chain.

"Integrating the paper chemicals business along existing value chains will allow BASF to optimally steer plant capacity and leverage the advantages of the BASF Verbund. This will strengthen our businesses and further increase the competitiveness of our Performance Products segment," said Michael Heinz, managing board member responsible for the Performance Products segment.

BASF said it will "remain committed" to the paper chemicals industry by providing sustainable solutions and technical expertise and that there will be no impact on supply security and service for customers.