Germany Baden-Wurttemberg state chem industry still struggling

28 January 2011 17:53  [Source: ICIS news]

TORONTO (ICIS)--The chemical industry in Germany’s wealthy south-western Baden-Wurttemberg state continues to struggle with the effects of the recession, even though the country’s overall economy keeps growing, a trade group said on Friday.

Thomas Mayer, general manager of chemical trade group Chemie Baden-Wurttemberg, said the state’s chemical producers had not yet regained their pre-crisis performance levels and were lagging behind Germany’s overall chemical sector.

Mayer went on to warn that 2011 wage increases needed to take into account conditions at the state’s many smaller and weaker chemical firms.

Baden-Wurttemberg counts as Germany’s wealthiest state. It is home to luxury car makers Mercedes and Porsche, as well as diversified technology giant Bosch and a large number of internationally successful machinery and engineering firms.

Mayer said one of the key reasons for the relatively weak performance in Baden-Wurttemberg’s chemical industry was lower sales by pharmaceuticals producers, which were hurt by government healthcare reforms.

Pharmaceuticals account for about 40% of Baden-Wurttemberg’s overall chemical industry sales.

Mayer said while the state’s chemical industry employers had managed to largely avoid cutting jobs during the crisis, producers needed to see sustainable growth this year - over and above pre-crisis levels - in order to keep employment stable.

Mayer was speaking in an interview with a German business publication that will be published on Saturday (29 January). Chemie Baden-Wurttemberg provided ICIS with a transcript.

The outlook for the state compares with a forecast of 2.5% in Germany’s overall chemical industry production in 2011. The increase would come after 11% year-on-year growth in 2010 and a 10% decline in production in 2009 from 2008.

Germany’s government has forecast 2011 economic growth at 2.3%. The increase this year would come after 3.6% growth in 2010 and a 4.7% decline in 2009 from 2008.

In related news, BASF CEO Jurgen Hambrecht warned this week against euphoria over the 2011 economic outlook.

Growth rates would be lower this year, compared with 2010 when producers caught up from the sharp decline in 2009 amid the global economic and financial crisis, he said.

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By: Stefan Baumgarten
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