Germany chems see downside from political situation – survey

Author: Stefan Baumgarten

2019/04/09

LONDON (ICIS)--A vast majority (94%) of chemical firms in Germany’s Rhineland-Palatinate state see the political situation in Europe as a negative for their business this year, according to a survey by regional chemical trade group Chemieverbande Rheinland-Pfalz.

BASF, Ludwigshafen. Source: BASF

The group has 190 member companies, including BASF with its Ludwigshafen petrochemicals production hub on the Rhine river. The chemical industry is the state’s largest industrial sector in terms of sales.

“The political developments within and outside the EU have further dimmed sentiment among member companies,” said the group’s director general, Bernd Vogler, in commenting on the survey.

With around 70% of the state's chemical products going into exports, Brexit and the US-China trade tensions would hit chemical firms in Rhineland-Palatinate, Vogler added.

For the first two months of 2019, orders in the state’s chemical industry were down 3.6% year on year.

However, chemical production rose 4.4% in the first two months, after falling 2.9% for the full year of 2018 when production was particularly hard hit by the low water levels on the Rhine and the downturn in Germany’s auto sector.

EUROPE
Like German chemical producers’ trade group VCI, the Rhineland-Palatinate group called on all employees and workers to vote in the 26 May European Parliament elections.

Going forward, a strong EU with its integrated economy would be needed more than ever to strengthen the chemical industry and create jobs, said Christian Metzger, the group’s chairman.

“Those who vote for Europe will strengthen the chemical industry,” he added.

Meanwhile, German and UK business leaders on Tuesday agreed a new "British-German Business Exchange Conference" (BGBEC) to make sure that trade between the two countries works – whatever the outcome of Brexit, officials said.

VCI has forecast a 3.5% year on year decline in the country’s overall chemicals-pharmaceuticals production this year.

Additional reporting by Jonathan Lopez