BASF does not rule out having to shut down a plant due to the price of electricity

The cost of electricity at the Tarragona plant has increased 5.5 times in the last year

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BASF facilities in Tarragona

BarcelonaThe multinational BASF has not had to shut down any of its plants in Spain for the moment due to the high price of energy. However, it does not rule out having to do so "if things continue to worsen", as the director of the German chemical company in the Iberian Peninsula, Carles Navarro, admitted Tuesday. The company's top executive indicated that in the last year the cost of electricity at the Tarragona plant, the company's main plant in Spain, had multiplied by 5.5.

Navarro pointed out that the company is highly dependent on fossil energy sources and "any increase in the cost of these resources will reduce profitability and our ability to compete". The executive gave some data: last year gas entailed additional costs for the group of €1.5bn; €800m in the last quarter alone.

Navarro also pointed out that for the moment the main effect of the war in Ukraine on the company has been the increase in the price of raw materials, since the company makes intensive use of gas and oil, but he indicated that there is "no problem of shortages". According to the executive, the multinational, "for humanitarian reasons", has decided to maintain its activities in health, nutrition and agricultural solutions in Russia and has indicated that the contracts in force will be maintained as long as there are no sanctions.

The company plans investments of €44m in Spain during 2022, of which approximately half will go to the Tarragona site, a plant where the company, hand in hand with Cellnex, has implemented an industrial 5G network that should make it possible to improve all processes. Navarro, who presented the company's results in Spain in 2021, indicated that he expects the company to grow this year, although he gave no details. Even so, he acknowledged that the year will be marked by "instability due to the conflict in Ukraine, the negative impact of energy prices and the scarcity of some raw materials".

2021: record sales

Regarding 2021, the chief executive of the chemical company indicated that it closed the year in Spain with a business growth of 12% in volume and 14% in prices. This led to a record year, with a turnover of €1.35bn, 25% more than the previous year, which was marked by the pandemic, and a figure that is an all-time record for BASF in Spain despite the problems in some sectors, such as automotive paints, where the microchip crisis affected production. The nutrition business was also affected by the lack of vitamins. On the other hand, other lines such as monomers, petrochemicals and dispersions had an "exceptional" year, with a significant increase in volume in the first part of the year and a sharp rise in prices in the second half.