German chemicals maker BASF is no longer able to fully supply certain products due to the low water levels in the Rhine River, CEO Markus Kamieth said on Monday, as a prolonged drought threatens to take a toll on Germany's economy.
Kamieth said that while there had been no significant impact on the company's financial results so far this year, the risk of disruptions to production was increasing with every week that the drought persists.
Despite the challenges, Kamieth said the situation remained under control, adding that the group was significantly better prepared for extreme weather than in 2018, when the Rhine's water levels were depleted by drought.
"Everything is still within manageable limits and, compared to 2018, this is a much smaller challenge for BASF," Kamieth told journalists on the sidelines of the ground-breaking ceremony for the expansion of a road and rail terminal at its headquarters in Ludwigshafen.
The water-level gauge at the chokepoint of Kaub near Koblenz remained around record lows of six centimetres (2.36 inches) on Monday, well below the previous record low level of 25 centimetres (9.84 inches) in 2018.
Analysts said in early August that record low Rhine levels risk curbing German growth, potentially dragging Europe's biggest economy back into stagnation just as it is showing early signs of a long-awaited recovery.
To maintain supplies to its main plant in Ludwigshafen, which sources about 40 per cent of its raw materials via the river, the company is increasingly relying on trucks and rail transport, in addition to specialised low-water vessels.
(Reporting by Patricia Weiss; Writing by Friederike Heine and Linda Pasquini; Editing by Ludwig Burger and Helen Popper)