The world’s top chemicals producer BASF
BAS,
-0.01%
on Wednesday set out plans to shake up its board, as the company struggles to retain its profit margins in the face of Germany’s energy crisis and the global economic slump.
The shakeup will see company insider Dr Markus Kamieth take over from incumbent CEO Martin Brudermüller in April 2024, BASF said in a statement, as it also outlined plans to appoint two new members to its board.
Dr Kamieth first joined BASF as a research scientist in 1999 and later took up a seat on the chemicals maker’s board in 2017.The pick sits in line with BASF’s tradition of choosing long-term company employees as its CEOs.
Shares in BASF stayed flat on Wednesday having increased by 6% over the previous 12 months.
BASF’s executive reshuffle comes as the German company has made a series of major cost cuts this year after lowering its guidance in July due to a slump in demand for chemicals, caused by a downturn in Europe, a slow recovery from COVID in China, and high inflation in the U.S.
High energy prices, as a result of the sanctions placed on Russia following its invasion of Ukraine, have also caused BASF’s costs to surge. Prior to the war in Ukraine, Germany had relied on supplies of cheap natural gas from Russia as its main source of energy.
The CEO switch follows announcements in May that BASF’s current chief Brudermüller would be leaving the German chemicals giant to take up a position as head of carmaker Mercedes-Benz
MBG,
-0.24%.
The executive shakeup will also see company executives Dr Katja Scharpwinkel and Anup Kothari take up new positions on BASF’s board of directors in February and March respectively.
Under Brudermüller leadership, BASF in April 2022 was forced to call off plans to list its oil and gas business Wintershall Dea on the Frankfurt Stock Exchange due to the company’s exposure to Russia.
Wintershall Dea, which was formed in 2019, is 67% owned by BASF, and 33% owned by Luxembourg investment fund LetterOne, which itself was founded by Russian oligarchs Mikhail Fridman and Petr Aven.
Aven and Fridman stood down from their positions in LetterOne in March 2022, following Russia’s invasion of Ukraine. The company was heavily involved in financing the Russia to Germany gas pipeline Nord Stream 2, which was blown up in April 2022.
Russian president Vladimir Putin on Tuesday ordered that Wintershall Dea be stripped of its stake in its stakes in arctic gas projects inside Russia, with those businesses instead set to be given to local Russian companies.
