BASF India Limited announced the closure of its Turbo Tube Dryer (TTD) unit at its Dahej manufacturing site, effective by the first half of 2025. The decision, approved by the Board of Directors on February 4, 2025, stems from the unit's outdated technology and consistently underperforming operations.

The TTD unit, which is part of the company's Care Chemicals business under the Nutrition & Care segment, has faced significant challenges due to its technology no longer in line with current Indian market standards. This technological obsolescence has resulted in a cascade of operational issues, including low utilization rates, escalating maintenance costs, an increased production of off-specification materials, and frequent write-offs. These factors have collectively contributed to the unit's adverse financial performance, ultimately leading to the decision to cease operations.

In the financial year 2023-24, the TTD unit generated revenues of Rs 377 million, representing a mere 0.3% of BASF India's total revenue. While the unit's revenue contribution was minimal, its operational inefficiencies have placed a burden on the company.

TTDs are efficient drying machines used across industries like pharmaceuticals, chemicals, and food processing. They utilize a rotating tube to dry materials quickly and gently, offering precise temperature control and short processing times. TTDs are often energy-efficient and require minimal maintenance, making them suitable for drying heat-sensitive substances like powders, granules, pastes, and liquids.

The closure is expected to result in direct fixed cost savings, offsetting the minor earnings loss associated with the unit's closure. The company anticipates that the cost savings realized from the shutdown will positively impact its bottom line.

BASF India's strategic move to close the TTD unit underscores the company's commitment to optimizing its operations and ensuring alignment with evolving market dynamics. By decommissioning outdated technology, BASF India aims to streamline its production processes, reduce operational costs, and improve overall efficiency. This decision reflects a broader trend in the manufacturing sector, where companies are increasingly focusing on adopting advanced technologies and modernizing their facilities to maintain competitiveness and enhance profitability.

While the company statement indicates the earnings loss from the unit was minor, the closure signifies BASF India's proactive approach to addressing underperforming assets. The company is prioritizing long-term sustainability and profitability over maintaining outdated and inefficient operations. This strategic realignment allows BASF India to focus resources and investments on more promising areas of its business, particularly within its Care Chemicals portfolio.

The company has not explicitly stated its plans for the Dahej site following the TTD unit's closure.