Germany chem group warns of slower growth, fears high energy costs

17 September 2010 20:42  [Source: ICIS news]

TORONTO (ICIS)--Chemical producers in Germany’s central Hessen state expect sales growth to slow in coming months, compared with a strong first half of the year when sales rose 8.8% year-on-year to €11bn ($14bn), an industry trade group said on Friday.

Also, producers were worried about rising energy costs which could triple by 2012, said Frankfurt-based Hessen Chemie. The trade group represents some 220 companies in Hessen’s chemicals and pharmaceuticals industry.

Sales growth would slow because of weakening economies in the US and China, the group said.

Export sales had been a key driver of the industry’s growth in the first six months of 2010 - rising 10.4% to €7.2bn, compared with the year-earlier period, it said.

Second-half growth would also be hit because of the end of economic stimulus programmes in Germany and elsewhere, the trade group said.

A key worry for producers were higher energy costs, a trend that was exacerbated by a recent government move to raise energy taxes as part a plan by Chancellor Angela Merkel’s government to cut budget deficits, the group said.

Under current projections, producers’ electricity costs in Hessen would triple by 2012, it said.

The group added it was looking to the Hessen state government to object to Merkel’s measures in Germany’s upper legislative house, the Bundesrat.

($1 = €0.76)

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By: Stefan Baumgarten
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