What tasks await the new BASF boss Kamieth

While its leadership changes, the chemical company BASF has to contend with many construction sites. But not everything that makes the outlook bleak can be blamed on the outgoing boss.

At the end of the Annual General Meeting, shareholders will witness the change of leadership at the top of the company: 53-year-old Markus Kamieth will take responsibility for BASF and its 112,000 employees worldwide. Kamieth is considered a homegrown employee, has been with the company for 25 years and has been in Germany for the least amount of time.

Described by those around him as approachable and authentic, the doctor of chemistry worked for a long time in the USA and most recently in China for many years. He has China expertise in common with his predecessor. Otherwise, he should be a completely different type of manager than the outgoing Martin Brudermüller: quieter, more sober, with a lot of trust in the team – someone who pretends less and listens more. However, not everything should be different now.

Crisis among the “Aniliners”

The BASF Ludwigshafen site has been in the red for years. The savings plans with 2,500 jobs already to be cut at the main plant will probably be followed by further cuts in the autumn. Plants are to be shut down and further jobs are to be cut.

At BASF this means: “New target image”. This should be negotiated with the employee representatives. Kamieth can also imagine a new location agreement: “First of all, I have a positive attitude towards location agreements; they have always proven successful. The next location agreement must of course fit the target.”

Brudermüller’s departure will not be quiet

The previous CEO of BASF Brudermüller wanted to get a lot of things in order before he stepped down. For six years he was on the bridge of the chemical giant from Ludwigshafen, he was on the board for 18 years, and his entire professional life – 36 years – at the “Badische Anilin und Sodafabrik”.

He himself recently said that he would have liked to hand over the company in better times. In doing so, he was not alluding to decisions under his responsibility that had maneuvered the company into a need to justify itself and had brought him personal criticism; Brudermüller meant external circumstances.

Difficult times for chemistry

Undoubtedly, the entire industry and therefore BASF would be in a better position if there had been no corona pandemic and no war against Ukraine, but instead intact supply chains, cheaper energy and weaker inflation. Demand would have collapsed far less, if at all; Companies would be less upset about the bureaucracy in Germany and would invest more in Germany than they currently do; profits would be more generous and investors would be happier.

Large parts of German industry lacked all of this, but no sector more so than the chemical industry: here, many billions of capital have moved abroad, and de-industrialization is progressing more rapidly than in all other sectors. Measured in the first half of 2023, chemical production fell by a good 20 percent over a five-year period, according to the Association of the Chemical Industry.

Could the job cuts have been prevented?

Employee representatives in particular also accuse Brudermüller of making poor decisions. They had repeatedly appealed to the boss to shift priorities. Like BASF works council chairman Sinischa Horvat: “We had different perspectives on many topics, such as job cuts, restructuring or spin-offs.”

Or Michael Vassiliadis, chairman of the chemical union IG BCE and member of the BASF supervisory board: “At times he was so committed and emotional about the matter that he got in his own way. The huge China investment he initiated is a huge bet “If there is no continued growth in the People’s Republic or geopolitical dangers arise, this could also harm Ludwigshafen.”

Commitment to China is not welcomed everywhere

However, the issue for which Brudermüller has received the most criticism in recent years is also one that his successor Kamieth has taken up: China. BASF is in the process of investing ten billion euros for a new Verbund site in Zhanjiang, BASF’s third largest in the world behind Ludwigshafen and Antwerp.

Here, based on the model of the plant in Ludwigshafen, many production processes are integrated and various products are manufactured for the automotive, electronics and battery industries in Asia. The outgoing CEO Brudermüller had always emphasized that he saw more opportunities than risks in business with China.

Two Chinese joint ventures in disrepute

But BASF’s involvement there is controversial: In February it became known that two of BASF’s Chinese joint ventures were said to have repressed Uyghurs. Politicians from various countries then demanded a change of course from BASF. Since then, there has been an indication on the BASF website that the company is in the process of selling the shares in the two joint ventures in Korla, China. When asked, the group confirmed this SWRthat this sale has not yet taken place.

Bad press doesn’t make business easier or investors happier. The company’s value, measured by the share price, is subject to constant ups and downs. It is no longer close to the values ​​of three years ago.

The new helmsman will stay on course

Anyone who always knew that only a friend of China could become CEO of BASF can feel confirmed by Kamieth’s appointment. When asked about the risks of the China business, he says that China is the world’s growth market, half of the world’s chemical market is located there, and in Asia as a whole it is even 70 percent. A global company like BASF cannot stay out of this. Kamieth, who has climbed several steps of his BASF career ladder in China, is sticking to the Far East strategy: “We are not ignoring the risks and feel very comfortable with our China strategy.”

If Europe becomes climate neutral in 2050 as planned, BASF should be too. Brudermüller stated this goal and describes it as one of his most important. His successor wants to continue with this project, but – like Brudermüller before him – also sees the government as having a duty: “It is clear that we are taking this path – but many external factors will play a role in how we achieve the goal. “

Criticism and protest general meeting

Brudermüller’s last general meeting will probably not be completely without disharmony: the umbrella organization of critical shareholders has called for protest and accuses the outgoing CEO of an “inadequate record in protecting the climate, the environment and human rights.”

The company was not able to independently identify acute human rights violations in direct business relationships: “Internal and external audits by BASF itself have identified blatant and sometimes obvious human rights violations and intolerable labor and employment conditions at suppliers and cooperation partners in China, South Africa and Brazil Living conditions not identified and remedial action not taken,” it said in a statement.

Effectiveness instead of job losses

It also calls on Kamieth to take more effective measures instead of cutting jobs: “Instead of cutting investments in the urgently needed social-ecological transformation of all BASF business areas, the group should reduce the dividend.”

There are many interests that will tug at BASF’s new CEO, and there are some construction sites that he has to bring to a successful conclusion. Kamieth knows BASF well enough and, with his level-headedness, gives many of those involved hope for a turnaround in the crisis. “He can help BASF,” says IG BCE trade unionist Vassiliadis. However: “He will have to prove that he can successfully steer the company through the years of transformation. He must remain the heart and brain of BASF.”