German chemical producers say the industry is in a deep recession and that it will not be able to recover until 2025 at the earliest.
A survey by VCI, the country’s chemical industry association, found that nearly 40% of companies have seen profits fall this year due to lower revenues and high production costs. About 15% have incurred losses, the group said late last week. VCI President Markus Steilemann said:
We are in the middle of a long, deep trough. It is still unclear how long we must persist to pass it. The longer this situation lasts, the more we must expect the shutdown of further plants.
Germany’s energy-intensive companies are still recovering from last year’s crisis and are still struggling to ramp up production in the face of low demand. Almost half of the chemical manufacturers surveyed said they do not expect a full economic recovery before 2025.
One in ten respondents said they are permanently shutting down production processes due to the difficult outlook for the industry in Germany. The VCI Group argues that energy prices must become more competitive and that the energy system must be built quickly – in addition to addressing Germany’s dilapidated infrastructure, skills shortages and excessive bureaucracy. The VCI group includes BASF SE and Covestro AG.
