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BASF, the world's largest chemicals maker by revenue, cut its profit outlook for 2008 and announced cutbacks in production, citing a "massive" decline in demand in key industries.

The previous year's earnings before interest and taxes (EBIT) before special items would not be reached, the group said today, adding it would temporarily shut down 80 plants worldwide and reduce production at a total of about 100 plants.

BASF had said last month it would "make every effort to match" last year's EBIT before special items.

Some 20,000 employees would be affected by the production cuts, of which about 5,000 are at its main site in Ludwigshafen, southern Germany, the company said today.

It said it was difficult to foresee how 2009 would develop and that it would prepare for "tough times".

BASF shares fell 13.1 per cent to €22.10 by 12.35pm, while the German blue-chip DAX index was down 2.1 per cent.