Under the programme, BASF said it would aim for 3 to 5 percent annual growth in earnings before interest, taxes, depreciation and amortisation (EBITDA) after averaging 8 percent a year since 2012. Analysts said the target was disappointing.

The firm's shares slipped 2.3 percent to 67.45 euros at 1200 GMT. The broader German market <.GDAXI> dipped 0.7 percent.

The programme to shore up EBITDA "will include measures focused on production, logistics, research and development as well as digitalisation and automation activities and organizational development," it said in a statement.

Chief Executive Martin Brudermueller, who took over in May, said the profit boost from the cost-cutting programme, dubbed "excellence", would come mainly from efficiency gains. But he said there would also be some revenue growth.

One-off costs associated with the programme would be 800 million euros, the company said. Brudermueller said any job cuts would depend on the strength of demand growth.

BASF did not give a timeline for the EBITDA growth target of 3 to 5 percent.

BASF recorded an EBITDA of 12.7 billion euros in 2017, up almost 21 percent from a year earlier. It said exceptionally high prices for chemicals used in rigid insulation foams or mattresses had inflated the comparable growth rate.

"The first glance on BASF's new strategy, which only targets 3 to 5 percent EBITDA growth per annum despite a new excellence programme .... might therefore be a disappointment," analysts at brokerage Baader Helvea wrote in a note.

BASF said it faced headwinds from the U.S.-Chinese dispute over trade next year and it would have to spend an additional 400 million euros a year to make its factories more reliable, following a number of outages.

"We had to learn, unfortunately, that we will have to look after our sites more intensively and more consistently," said finance chief Hans-Ulrich Engel.

Among technical glitches and outages last year, a fire at a plant at its Ludwigshafen headquarters delayed delivery of vitamins and aroma ingredients. The company also recalled products used in the production of foam materials, after a technical error caused excessive levels of dichlorobenzene.

"It's reasonable to assume that 2019 won't be quite easy," the CEO told a news conference in Ludwigshafen, when asked about headwinds from the trade dispute.

BASF said it would focus primarily on organic growth through investment and innovation with a focus on China, the world's largest market for chemicals and plastics. It would make acquisitions where necessary, the company added.

Deals, if any, would most likely be in nutrition and care chemicals as well as agricultural supplies, according to a company presentation.

(Reporting by Ludwig Burger; Editing by Louise Heavens and Edmund Blair)

By Ludwig Burger