Energy Crisis: German Chemical Industry Hits Slump in Business and Morale

Study sees untapped potential in Africa

17-Nov-2022 - Germany

Not only economic expectations, but also the satisfaction of the German chemical industry with Germany as a busines site have reached an all-time low. The main reasons for this are prices and availability of feedstock and energy sources, which have led to production cuts and a decline in sales in Q3 2022. Medium-term opportunities to solve the challenges are arising in Africa. However, these are still largely unexploited.

This is the result of the current CHEMonitor trend barometer by CAMELOT Management Consultants and the trade journal CHEManager. In the current CHEMonitor survey, only slightly more than one-third of the chemical managers surveyed rated Germany as “good”, the lowest value since the survey was launched in 2013. The result reflects the current dramatic situation in the chemical industry. On top of the ongoing disruptions in supply chains and the uncertain economic outlook, there are massive price increases for feedstock and energy sources combined with the risk of extreme shortages in Europe.

“In the current situation, companies that have a good grip on their supply chains and respond more quickly to changes in the environment will fare better. This is supported by new technologies and systems that enable resilience, intelligence and excellence to be firmly embedded in supply chains. Companies that take advantage of these opportunities are more capable of absorbing disruptions and managing their business in the best possible way,” says Dr. Josef Packowski, Managing Partner at CAMELOT.

Significance of the African region

The focus of the current CHEMonitor trend barometer is Africa. The majority of the chemical managers surveyed see Africa primarily as a feedstock and sales market (86% and 82% of mentions, respectively). However, 77% of them expect a significant increase in Africa’s importance for the German chemical industry. Yet only 8% of the chemical managers surveyed stated that their own companies have a production site in Africa. More than half (55%) answered that their company had no activities on the continent at all. “This means that the chemical industry runs the risk of leaving the growth potential in Africa to other economies,” says Dr. Jörg Schmid, head of the CHEMonitor study at CAMELOT.

Important EU partner for Green Deal

Two-thirds of the top managers surveyed believe that green energy from Africa will make a significant contribution to achieving global climate targets. According to 85% of CHEMonitor survey participants, Africa will produce enough renewable energy to supply itself and also other regions. This makes the continent an important strategic partner for Europe in terms of successful implementation of the EU Green Deal. More than half of the chemical managers polled believe that cooperation between Europe and Africa is a necessary precondition for the success of the Green Deal. For the current CHEMonitor study, top managers in the German chemical industry were surveyed from mid-September to mid-October 2022.

https://www.chemeurope.com/en/news/1178526/energy-crisis-german-chemical-industry-hits-slump-in-business-and-morale.html