In December, the VCI announced 2016 data on the business developments of the German chemical-pharmaceutical industry; Germany’s third largest industry. Despite the European and global economic difficulties, investments were stable at a high level of 7.1 billion EUR. Capacity utilization and employment (446,300 staff) were stable. Production growth was with an increase of 0.5 % lower than had been assumed. When excluding the pharma share, the production volume was stagnating. Sales fell by 3 % due to another drop in producer prices.
Research budgets in the industry increased once more. In total, the companies spent roughly 10.7 billion EUR on research and development. This is 2 % more than in 2015.
According to Cefic, chemical production in the European Union (EU) stagnated (+0.0 %) in 2016. Globally, demand for chemicals is increasing year on year. However, the share of the EU chemical industry continues to decline. It now stands third behind Asia and the US in terms of worldwide sales.
The VCI predicts a production increase by 0.5 % for 2017 in Germany. With a slightly rising price level (+0.5 %), total sales should improve by 1 % to 185 billion EUR. The VCI expects that only foreign business will contribute to growth (+1.5 %). Cefic predicts a production increase in the EU in 2017 of around +0.5 %. In comparison, the American Chemistry Council (ACC) expects an overall growth in chemical production (excluding pharmaceuticals) of 1.6 % in 2016 and of 3.6 % in 2017.
In the long run, according to the VCI, the chemical industry will undergo fundamental changes: Growth centers will shift to Southeast Asia, international competition will become harder for companies which manufacture in Germany, and the globalization and digitalization of value chains will make changes in the production methods and business models necessary. The industry should become an established provider of all-round solutions for customers.
Sustainability should become the concept for the future as already highlighted by the German initiative Chemie3. “The vision of a global climate-neutral management style, the political goal of a circular economy in the EU or the Energiewende (energy transition) in Germany bring for us tasks to utilize our ability to innovate,” said Kurt Bock, VCI President.
- German Chemical Industry Association (VCI; Verband der Chemischen Industrie), Frankfurt, Germany
- Cefic (the European chemical industry council), Brussels, Belgium
- American Chemistry Council (ACC), Washington, D.C., USA