Germany's chemical industry optimistic about outlook – survey

24 February 2012 17:20  [Source: ICIS news]

LONDON (ICIS)--Germany's chemical industry is very optimistic about its business conditions and outlook, despite uncertainties and volatility in the eurozone, a consultancy group said on Friday, citing an industry survey.

Mannheim-based Camelot Management Consultants said its latest survey of more than 300 decision makers in Germany’s chemical industry showed that firms were even more optimistic than in a previous survey in late 2011.

About 95% of respondents said that their operating environment in Germany was good and 75% were confident it would remain so. Large firms were slightly less optimistic than smaller producers, the consultancy added.

The economic volatility in the wake of weakness in the eurozone remains a challenge for Germany’s chemical producers, the consultancy said.

However, producers were well-prepared as they had taken decisive steps in the 2008/2009 global economic and financial crisis to streamline operations and logistics, improve management of working capital and liquidity, and to ensure flexibility in the use of their staff.

Camelot consultant Sven Mandewirth said that 60% of firms polled said they were much better prepared for a downturn than in 2008.

Mandewirth also noted that many smaller chemical firms were no longer outsourcing as many services as they used to.

”For larger producers, outsourcing is a benefit, but many smaller firms have re-integrated services they had previously outsourced,” he said.

So far, the 2012 first quarter was developing well for Germany’s chemical producers, Mandewirth said. He pointed to strong German domestic demand and signs of a recovery in the US.

The Camelot survey contrasts with a more modest 2012 outlook by Frankfurt-based chemical producers’ trade group Verband der Chemischen Industrie, which has forecast 1% year-on-year growth in Germany’s chemical production this year - down from the 4.0% growth in 2011 from 2010.

In related news. Kurt Bock, the chairman of Germany-based chemical major BASF, said on Friday his firm aims to exceed 2011’s record sales levels in 2012 and the following years to 2020.

However, Dow Chemical CEO Andrew Liveris said that the European market saw considerable weakness in the 2011 fourth quarter. Dow does not anticipate material improvements in market conditions in the first quarter, but it expects that economic recovery will gain momentum later in the year, Liveris said.

In similar comments, Stephen Newlin, CEO of US-based polymer materials firm PolyOne, said last week that fragile European market conditions will likely hurt the company’s growth rates this year.

Additional reporting by Leigh Stringer

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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