The German Chemical industry facing record year

The German chemicals industry is looking at another record year. The Chemicals Industry Association (VCI) expects an increase in turnover of 4.5 per cent for 2008, and a production increase of 2.5%. This was announced to journalists by VCI President Ulrich Lehner in Frankfurt. Lehner also expects another rise in the capacity utilisation of chemicals plants, which is currently at an above-average of 87 per cent. However, with these figures the industry will not quite follow on from this year's excellent growth: According to the figures available to the Association, in 2007 it will achieve turnover growth of 7.5 per cent to EUR174.4 billion and a 4.5 per cent increase in production.

Lehner (who is also CEO of the chemicals and consumer goods group Henkel) cites a number of dampening influences as the reason for the presumed decrease in 2008. These include the strong Euro, the high price of oil and turbulence on the financial markets that still has to be overcome. With regard to the past two years, in which the VCI raised its forecasts as the year progressed in each case, Lehner said that it is advisable to express more cautious expectations than to be caught cold after making excessively optimistic predictions. However, Lehner denied that the VCI is tending towards making too-low forecasts in the run-up to the collective wage negotiations scheduled for February.

Like last year, the German chemicals industry this year profited from the strong international demand for chemicals goods, including from the high-growth threshold countries but also from the EU. Foreign turnover increased by 8 per cent to EUR95.1 billion. However, business in Germany was also excellent: Domestic turnover rose by 7 per cent to EUR79.3 billion. After many years of reservation, the industry is now again investing to an increasing degree in Germany: For 2007, Lehner announced investments in domestic tangible assets amounting to EUR6.5 billion (last year: EUR5 billion). Whereas in previous years it was mainly old plants being replaced, according to Lehner it is now the extension of plants that is playing an increasingly important role. This is a reason why in 2007, the number of employees in Germany increased again for the first time since 1991, by 0.2 per cent to 436,900. Lehner expects another increase in 2008.