Boston, MA -- (SBWIRE) -- 07/19/2012 -- BMI's Germany Petrochemicals Report looks at the opportunities for sector growth at a time when the economic environment in Europe is increasingly hostile, with production prices having fallen and demand stagnating.
This report examines how German producers will achieve growth in the future - perhaps by focusing on value-added segments such as speciality chemicals - even at a time when basic chemicals production is surging in emerging markets at the expense of the industries in developed states. The report also analyses the growth and risk management strategies outlined by the leading players in the sector.
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The German chemicals industry reported a decline across all segments in H211 in line with the increasingly hostile economic environment, but this slump appeared to have bottomed out by H112 with prices stabilising and production falling into equilibrium with market conditions at home and abroad. The German chemicals industry is set to stagnate in 2012 following two years of recovery due to the impact of the eurozone debt crisis, as well as a slowdown in export markets outside the EU, such as China and the US. Key growth drivers will be in high-end specification plastics and speciality chemicals, rather than the basic chemicals and polymers traded by producers in the Gulf region. This should, in due course, spur investment in the expansion of existing capacity and lead to growth in research and development, with a focus on German operations.
While some basic chemicals plants are being closed, more specialised petrochemicals units are being established. Lanxess is in the process of expanding some specialised petrochemicals derivative plants in Germany; Evonik Industries is building a functionalised polybutadiene plant at Marl which will allow the company to offer hydroxyl-functionalised polybutadiene; and BASF has expanded its production of extruded polystyrene (PS) insulation material by 17%. BASF is also raising the compounding capacity at its Ultramid nylon engineering plastics and Ultradur polybutylene terephthalate facilities at Schwarzheide. Meanwhile, Bayer MaterialScience (BMS) is reactivating a project to build a 300,000 tonnes per annum (tpa) toluene diisocyanate (TDI) plant at Dormagen, which is due to come onstream in 2014 and replace the company's existing TDI facilities at Dormagen and Brunsbuttel.
Over the last quarter BMI has revised the following forecasts/views:
- We have revised our forecast for the German chemicals industry. We initially anticipated a contraction of 1%, but now expect zero growth. Meanwhile, we have retained our sales growth rate at 1-2%.
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