BASF India Limited approved the closure of selected manufacturing units within its Care Chemicals business at the Dahej site in Gujarat. The company is taking the step in response to intense market competition, excess capacity and continuing pressure on profit margins. The closure will affect the site’s sulfation and low-temperature reactor plants, which BASF India considers economically unviable under current market conditions.
Dahej Facilities Face Capacity and Margin Pressures
According to the company, significant overcapacity in the Indian market has intensified competition and put pressure on margins. At the same time, rising operating costs have made it increasingly difficult to maintain the economic viability of the affected production units. Consequently, BASF India has decided to streamline its Care Chemicals operations and remove capacity that is no longer commercially sustainable. The company expects to complete the closure by the end of calendar year 2026, subject to receiving all required regulatory approvals.
Care Chemicals Business to Continue in India
Although BASF India will shut the identified manufacturing units, the company will continue its Care Chemicals business in the Indian market. The company plans to serve customers through a combination of local manufacturing, imports and sales of other chemical products, depending on market demand. Furthermore, BASF India has stated that the targeted plant closures will not disrupt the broader supply chain for its remaining Care Chemicals product portfolio.
Dahej Operations Contributed ₹542 Crore in FY25
The affected manufacturing operations accounted for a meaningful portion of BASF India’s revenue. During FY25, manufacturing activities at the Dahej site generated approximately ₹542 crore in revenue, representing around 4% of BASF India’s total revenue. While the contribution is relatively modest compared with the company’s overall business, BASF India is moving to optimise its cost structure and address the impact of excess capacity in the market.
Restructuring Targets Nutrition and Care Segment
The affected facilities form part of BASF India’s Nutrition and& Care segment. The restructuring will specifically target production lines facing underutilisation and high fixed operating costs. By closing these units, BASF India aims to reduce the financial burden associated with excess capacity and improve the efficiency of its remaining operations. At the same time, the company will use alternative manufacturing sources and imports to maintain the availability of products for customers.
BASF India Focuses on a More Efficient Operating Model
The Dahej plant closure represents a targeted restructuring rather than an exit from the Indian Care Chemicals market. As competition and capacity pressures continue to affect the chemical industry, BASF India’s decision highlights the importance of cost optimisation, capacity management and flexible sourcing. As reported by scanX, the restructuring is expected to help the company align its manufacturing footprint with market demand while continuing to support customers across India’s Care Chemicals sector.
