Boston, MA -- (SBWIRE) -- 10/11/2012 -- 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 costs rising 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.
In H112, the German chemicals industry reported a 4% year-on-year (y-o-y) decline in output; excluding pharmaceuticals, output fell 3.5%. Meanwhile, production costs increased 3.0% y-o-y with producers passing on the rise in raw materials costs to buyers. Sales by German chemical producers fell 0.5% y-o-y to EUR89.2bn, of which 40% were domestic and 60% foreign. Foreign sales fell 1.0% due to the poor economic situation in southern Europe, while domestic sales increased 0.5% as a result of the relative strength of the German economy. German chemical exports, including re-exports and chemicals exports by non-chemical industries, grew 1.0% to EUR77.2bn, while imports grew 2.0% to EUR54.1bn. Growth in exports came solely from Asia, South America, Africa and the USA. Exports to Latin America grew 17.5% y-o-y, exports to North America rose 9.0%, exports to Africa also increased 9.0% and exports to Asia grew 4.0%. Meanwhile, exports to the EU-12 declined 0.5% while exports to the EU-15 (the states that acceded from 1995) fell 3.5%.
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BMI's forecasts for 2012 remain unchanged since last quarter, with zero growth in chemicals output expected. 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 into the expansion of existing capacity and boost research and development, with a focus on German operations.
Over the last quarter BMI has revised the following forecasts/views:
- BMI anticipates German chemicals production growth of 2-3% in 2013 with the industry's longterm prospects looking promising on the back of expected growth in the automotives, mechanical engineering and electronics industries.
- Production growth is set to continue at 2.0-2.5% per annum up to 2020, although in terms of value it should rise at a faster rate.
- Germany scores 81.4 points and is placed first in BMI's Western European petrochemicals ratings, 7.9 points ahead of France. BMI believes that Germany's score is unlikely to change dramatically, with no major basic petrochemicals capacity additions planned.
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