BERLIN: German chemicals giant BASF on Wednesday announced cost savings worth 500 million euros ($485 million) a year in 2023 and 2024 on the back of “significantly weaker earnings in Europe”.

The programme will focus on “Europe and particularly Germany”, said the group, adding that “cost savings possible in the short term will be implemented immediately”.

A BASF spokesman told AFP the programme will include job cuts, but did not specify how many.

BASF produces a wide range of chemicals for the automotive, agricultural, construction, plastics, paint and dye industries.

As Germany’s largest consumer of gas, the group has been hit hard by the energy crisis the country has been facing as a result of the war in Ukraine.

BASF’s Ludwigshafen plant in western Germany is the world’s largest chemical production plant, employing some 39,000 people, and is seen as particularly exposed to the consequences of a gas shortage.

The plant had previously been supplied primarily with Russian gas, deliveries of which have dwindled amid tensions with Moscow over its invasion of Ukraine.

More than half of the cost savings are to be realised at the Ludwigshafen site, BASF said.