BASF’s North American business increases cost savings
31/10/2005
BASF Corporation, BASF’s North American subsidiary, has announced that its ongoing restructuring programmes will yield an additional $150 million in annual fixed cost reductions by mid-2007. The company expects one-time costs of $80 million arising from these measures.
The added savings are beyond the originally targeted $250 million already achieved and will bring the total fixed cost reductions for the restructuring programme announced in early 2003 to $400 million annually. This goal was reached in the second quarter of 2005, 18 months earlier than scheduled.
In addition to the cost reductions, the company expects to see its earnings before interest and taxes rise by $200 million on an annualised basis by 2007 as a result of the company’s Commercial Effectiveness programme. Commercial Effectiveness involves the adoption of new pricing methodologies and business models, as well as focusing technical and developmental capabilities on customers with whom BASF can grow profitably.
The added savings are beyond the originally targeted $250 million already achieved and will bring the total fixed cost reductions for the restructuring programme announced in early 2003 to $400 million annually. This goal was reached in the second quarter of 2005, 18 months earlier than scheduled.
In addition to the cost reductions, the company expects to see its earnings before interest and taxes rise by $200 million on an annualised basis by 2007 as a result of the company’s Commercial Effectiveness programme. Commercial Effectiveness involves the adoption of new pricing methodologies and business models, as well as focusing technical and developmental capabilities on customers with whom BASF can grow profitably.
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