28 April 2009 18:24 [Source: ICIS news]
TORONTO (ICIS news)--Some 60% of chemical firms in BASF’s home state of Rhineland Palatine have applied for or are already implementing short-time working schemes as they try to cope amid collapsing sales, a German regional chemical industry group said on Tuesday.
In Rhineland Palatine chemical sales were down by an estimated 28% in January and February, from last year, Chemieverbande Rheinland-Pfalz said. This compares with a 27% decline for all of ?xml:namespace>
Especially hard hit by the decline were smaller producers who had no means to offset the loss of a large order, Klaus Heinlein, head of the group, said.
“The coming months will be very hard for the state’s chemical industry,” he said.
However, despite the sharp drop in sales, employers were committed to maintaining employment and avoid permanent job cuts, as long as this was economically viable, Heinlein said.
A key instrument were the government-subsidised short-time working schemes.
BASF CEO Jurgen Hambrecht last week called for an extension of the schemes to 24 months. Their duration was recently increased to 18 months as part of
Under short-time working schemes, employers reduce wages in line with reduced hours, but workers are being partly compensated for the loss in wages by payments from government unemployment insurance.
However, economists have warned that short-time working was hiding the true extent of underemployment in
Meanwhile, Chemieverbande Rheinland-Pfalz also noted the increased burden the state’s chemicals producers were facing from the European Union’s Reach directive.
Again, it was the smaller producers who were struggling with the increased costs from Reach (registration, evaluation and authorisation of chemicals), it said.
In 2008, the state’s chemicals industry recorded a 3.1% increase in sales to €24.8bn ($32.2bn).
($1 = €0.77)
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