FRANKFURT (Reuters) - The incoming boss of BASF (BASFn.DE) has thrown his weight behind the chemical titan’s contentious strategy of keeping divergent businesses folded into one company, at a time when its major rivals such as DowDuPont are breaking themselves up.
The comments from Martin Brudermueller, who will take over as CEO on Friday, provide clarity on a key strategic issue that is dividing investors, in marked contrast to predecessor Kurt Bock who would not be drawn on which path he favored.
The German group has grown from a 19th century indigo dye workshop to a diversified juggernaut worth $95 billion. It is the only major Western chemicals player banking on an integrated value chain - which it dubs “Verbund” - where a company owns businesses throughout the production process.
“We often hear the Verbund getting criticized for being too rigid. That’s not true,” said 56-year-old Brudermueller.
“If you have everything under one roof, you can coordinate things much better, that is the sense in which we will develop it further. You wouldn’t normally want to sell attractive businesses that are growing,” he told Reuters and other reporters in remarks released late on Tuesday.
At its Ludwigshafen headquarters and at five other hubs abroad, BASF runs close-knit networks of chemical reactors that churn out products as diverse as basic commodities, coatings, vitamins, drug ingredients and engineering plastics.
Bock, when asked in February whether BASF would continue to have diverse businesses under one roof or was considering other options, said the company might learn from what rivals did but did not say which path he favored.
Both strategies have potential advantages;