Chemical and pharmaceutical industries
Chemical industry lowers business outlook – employment stable
Expensive energy and the poor global economy are causing problems for the chemical and pharmaceutical industries. The hoped-for recovery is difficult to get off the ground. There is good news when it comes to employment.
In the German chemical and pharmaceutical industry, the hoped-for recovery is only getting off to a difficult start. Given the weak economy, the Chemical Industry Association (VCI) only expects subdued production growth of two percent in the current year. At the same time, sales are expected to fall by two percent.
Many industrial customers reduced their production, which also caused demand for chemical products to fall, explained the industry association in Frankfurt. In addition, there are weak pharmaceutical businesses in foreign markets. The VCI had previously expected industry sales to increase by 1.5 percent and production by 3.5 percent this year.
Despite the pressure, employment has recently remained stable at around 480,000 people in this country. While some chemical companies are cutting jobs, the workforce in parts of the pharmaceutical industry is growing, it said.
Demands on the new federal government
“The crisis is largely self-made,” criticized VCI Managing Director Wolfgang Große Entrup. He called for lower energy prices as well as less bureaucracy and taxes. “With a view to the USA, too, a new federal government must now urgently ensure better framework conditions.”
Chemicals is the third largest industrial sector in Germany after automobile and mechanical engineering. It has long been suffering from energy prices that are high compared to international standards and the weak economy. Last year, the energy-intensive industry had to cope with an eleven percent decline in production.
Large chemical companies in crisis
In the third quarter, production in the chemical and pharmaceutical industry fell by 2.7 percent compared to the previous quarter, and sales fell by 2.5 percent. Compared to the same period last year, production grew minimally (plus 0.1 percent) with low capacity utilization.
Many chemical companies are in crisis. Industry leader BASF has launched several savings programs with extensive job cuts and the dividend is being cut. At the same time, parts of the business are to be sold and the agricultural division is to go public. BASF does not rule out the closure of further chemical plants at its main plant in Ludwigshafen. The Essen-based specialty chemicals group Evonik is also cutting jobs.
dpa
Source: Stern
