BASF Sharpens Focus: Cost Cuts, Circular Partnerships, and a New Coatings Chief

BASF launches 'CoreShift' cost-cutting program, strengthens circular raw materials via Encina partnership, and announces coatings leadership transition to fortify margins and growth.

BASF is moving on multiple fronts to reshape its operations, from a sweeping cost-reduction programme to deeper ties in chemical recycling and a leadership handover in a €3.7 billion coatings business. The common thread: a push to fortify margins and secure future growth channels.

The centrepiece of the group's internal overhaul is "CoreShift", an efficiency drive within the broader "Winning Ways" strategy. It targets a 20% cut in cash-effective fixed costs in the core business by 2029, measured against the 2024 baseline. A dedicated Core Transformation Office has been set up, headed by Julia Raquet, who reports directly to CEO Markus Kamieth. The office will coordinate cross-divisional projects spanning all core business fields, service units and the corporate centre, with an eye on persistently high energy costs and structural pressure on Europe's chemical sector.

Alongside the cost-cutting push, BASF is strengthening its bet on circular raw materials. The group has deepened its partnership with US recycler Encina Development Group, moving beyond a simple supply agreement. Since June 2024, BASF has been buying chemically recycled benzene from Encina. Now it will also advise the Texas-based company on procurement strategy and project planning for new production sites, and holds an option to join as an equity partner in global expansion projects. The goal is to secure the raw material base for its "Ccycled" product portfolio and reduce dependence on fossil resources. "We are actively shaping projects at an early stage — not just a passive buyer, but a strategic partner," said Thomas Ohlinger, Senior Vice President for traded products.

Operationally, BASF continues to notch up small wins. Its acetylene plant in Louisiana received the "Responsible Care Energy Efficiency Award" from the American Chemistry Council in early June, for a digital control system that cuts energy consumption and greenhouse gas emissions at the site. In Shanghai, the group is showcasing integrated petrochemical technology solutions and high-performance catalysts tailored for the Chinese market at the CIPPE trade fair.

Meanwhile, the coatings division is preparing for a leadership transition. On 1 July 2026, Steve Arndt will take over as Senior Vice President Global Automotive Refinish Coatings, succeeding Chris Titmarsh. Arndt brings over three decades of experience in the automotive refinish market, having served as Global Distribution Sales Director at Axalta Coating Systems, overseeing sales in more than 140 countries, and previously as President and COO of FinishMaster, described by BASF as the leading independent automotive refinish distributor in North America. The appointment underscores the importance of distribution networks and workshop relationships in this niche. Titmarsh leaves after 20 years at BASF, more than six as global head of the business, having strengthened customer focus and global collaboration.

The leadership change comes against a backdrop of subdued group results. In the first quarter of 2026, BASF's sales slipped to €16.0 billion from €16.5 billion a year earlier, while EBITDA before special items fell to €2.36 billion. The Surface Technologies segment, which houses the coatings business, saw price gains driven by higher precious metal prices but volume declines; segment EBITDA still improved year-on-year. For the full year, management holds to its forecast of EBITDA before special items of between €6.2 billion and €7.0 billion, and free cash flow of €1.5 billion to €2.3 billion, albeit with high uncertainty around energy and raw material costs and supply chain risks.

The stock market reflects the caution. BASF shares closed at €50.44, roughly 3.6% below the 50-day moving average. That marks an almost 20% gain over the past twelve months, but the stock has shed about 8% from its April high of €55.05. The primary article, reporting a slightly later session, put the stock at €50.89, up 0.69% on the day, with a year-to-date advance of around 14% — still nearly 8% shy of that April peak.

Whether CoreShift can deliver the margin stabilisation needed to close that gap depends on how quickly the fixed-cost savings show up in quarterly results. The autumn report should provide the first hard numbers. For now, BASF's direction hinges on the chemical cycle, raw material costs, and the execution of its dual agenda — not on a single executive appointment.