BASF to Completely Withdraw from Russia and Belarus Businesses by July Deadline
[Asia Economy Reporter Park Byung-hee] BASF, the world's largest chemical company based in Germany, announced on the 27th (local time) that it will completely withdraw from its businesses in Russia and Belarus by early July.
According to major foreign media on the day, BASF stated that the Ukraine war could trigger a global food crisis and that it will wind down all operations except for those supporting food production. BASF is the world's largest chemical company by sales.
BASF currently employs 684 people in Russia and Belarus and said it will support them until the end of this year.
BASF has a long-standing relationship with Russia. The company's first overseas site was established near Moscow in 1877. However, despite this long history, the Russian and Belarusian markets account for a small portion of BASF's business. Last year, these two countries accounted for only about 1% of BASF's sales.
However, BASF has suffered significant damage due to the Ukraine war. Wintershall, BASF's oil and gas subsidiary, announced last month that it wrote off 1.1 billion euros in loans related to the Nord Stream 2 gas pipeline project.
Because of this, BASF expects its net profit for the first quarter of this year to be 1.2 billion euros, only two-thirds of the analysts' forecast of 1.8 billion euros. BASF is scheduled to officially announce its first-quarter net profit on the 29th.
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BASF is also embroiled in political controversy surrounding Germany's import of Russian natural gas. BASF is one of the companies most vehemently opposing the suspension of Russian gas imports. Martin Bruderm?ller, chairman of BASF, warned that if Russian gas imports are halted, the German economy will face its greatest crisis since World War II. According to German law, in the event of a gas shortage, companies like BASF must forcibly reduce gas consumption to secure gas supply for households and critical infrastructure.
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