Challenges ahead for German chems industry - Hambrecht

FRANKFURT (ICIS news)--The German chemical industry is facing a number of challenges to its business, some of which the country’s next government could help solve, BASF chairman Jurgen Hambrecht said in his last speech as president of the chemical industry association VCI before handing over to Bayer’s Werner Wenning.

Speaking to the VCI general assembly in Munich, Hambrecht pointed to what he views as the principal challenges – globalisation, innovation, energy and environmental politics. The BASF chief pointed out that many people in Germany and elsewhere perceive globalisation as a threat rather than as an opportunity, which “gives rise to protectionism and state intervention – both of which endanger our business”.

He conceded, however, that globalisation can be a threat if countries such as Germany do not do more to bolster their innovativeness. While urging that the next government – which he said he hoped would be constituted without any further delay –  to take steps to improve the educational system, in particular the universities, he warned that the chemical industry may be falling behind in its commitment to research and development (R&D).

Germany accounts for around 17% of the world’s spending on chemicals R&D, although its share of world chemical sales is only 8%. But Hambrecht noted that, if the pharmaceuticals sector is excluded, spending has stagnated for the past several years. “The Asians – especially the Chinese – are pursuing us with increasing speed,” he remarked.

The outgoing VCI president warned also that the German chemical industry is not hiring enough new post-docs, due in part to the weak economy and its increasing engagement abroad. But, he said: “We must give students a perspective.”

The energy policies of the current Social Democrat-Green government have been a thorn in the side of the chemical industry. Correcting this should be at the top of the new government’s agenda, Hambrecht suggested. Along with security of supply, he said competitiveness and a review of environmental policies are the key words here. 

The government’s attempts to improve the environment through levies on industrial production have damaged German chemical companies’ competitiveness without improving the situation, said Hambrecht, while calling for an “international approach” to climate control.  

The idea embraced in particular by the Green partner in the coalition government, that renewable raw materials are per se good and nuclear energy bad has not helped, nor has the lack of competition among energy providers, said the BASF chief. He added that lack of competition among energy providers has made the situation worse. 

Whichever parties form the next government, certain things will not change for chemical producers, Hambrecht noted, while singling out the European Union's (EU’s)  environmental policies as an added insult. Not only the German public tends to perceive chemicals production as a risk. This view is also prevalent in other countries and, especially in view of its approach to Reach, the European Parliament has contributed to the problem, he hinted.

In Hambrecht’s view, the chemical industry, in Germany and elsewhere, must communicate to the public how useful its products are and openly discuss their possible risks as well as fill in gaps in their knowledge. Producers “must take the public’s fears of the public seriously, whether or not these have any scientific basis.”

Hambrecht called for the chemical industry to engage in an “open dialogue” with the political sector and the public. If the industry “displays openly” that it knows how to handle its products, this will reduce the pressure from the political side to consider stricter regulation, he said.