Hundreds of BASF workers protested in Berlin Friday over planned job cuts and a shift of production to Asia, a demonstration of growing unrest within Germany’s chemical industry as geopolitical headwinds and economic pressures mount.
The protests follow an announcement of 550 layoffs at Lanxess, another German specialty chemicals maker, as the company grapples with falling sales and weak demand. The cuts, primarily in Germany, signal a broader contraction affecting the sector, once a cornerstone of European manufacturing. LANXESS’s restructuring plan, launched in 2023, has already achieved €110 million in cost savings, and the company aims for an additional €50 million in annual savings by 2027.
The downturn is driven by a confluence of factors, including vanishing industrial demand, shrinking order books, and the impact of modern U.S. Tariffs. Intensifying competition from China is as well exerting significant pressure on European chemical companies. Business climate confidence in the German chemical sector plummeted to multi-year lows in July 2025, with no meaningful recovery currently forecast until at least 2026.
BASF Chief Executive Markus Kamieth is attempting to revive the company after years of restructuring, but the ongoing war in Iran casts a shadow over these efforts. The conflict adds another layer of uncertainty to an already volatile global landscape.
LANXESS has been actively restructuring, including the April 2025 divestiture of its Urethane Systems business for €500 million. The proceeds were used to reduce net debt by 18% to €2.069 billion as of Q2 2025. Although, the company’s debt-to-EBITDA ratio remains high, hovering near 4x, raising questions about its long-term financial stability.
Analysts suggest that leading players in the specialty chemicals and polymers markets are facing a significant inflection point. Weakening customer pipelines and persistent excess supply indicate a demand environment unlikely to rebound quickly. Companies are dialing back growth expectations and focusing on disciplined resource allocation. The shift in competitive context, with U.S. Tariffs and Chinese competition, is forcing producers to relocate production closer to demand or to lower-cost regions.
LANXESS is targeting a 10% EBITDA margin by 2028, but success hinges on global market stability. The company’s debt currently stands at 3.56-3.95x EBITDA.
