Chemical industry copes with cost pressure: sales development has bottomed out
Positive outlook for 2025
More than 80% of company managers at large chemical companies with European business expect moderate sales growth by the end of the year, with the majority expecting less than 5%. For 2025, over 90% of the managers surveyed are much more optimistic: almost two thirds of them are forecasting sales growth of over 5%. At the same time, a similarly positive development in bottom-line growth is expected. These are the findings of the annual "Chemicals Executives Flash Report" study by management consultants Horváth.
"Compared to last year, companies are again expecting more growth in their product portfolio, driven by recovering prices and volumes, i.e. higher sales. M&A activities are also back on the top management agenda," says Peter Hartl, chemicals expert and partner at management consultancy Horváth. "Growth markets are primarily regions outside Europe." In addition to top-line growth, companies are also making progress on their bottom line. "The cost-cutting initiatives are having an impact. Compared to 2023, earnings growth in this dimension is much easier to achieve because the inflation risk has not disappeared, but it has been greatly reduced," says Horváth expert Hartl. "Another positive aspect: No savings are being made on research and development, marketing and sales - companies have the necessary resources and future opportunities firmly in their sights."
Resilience is gaining in importance
According to Hartl, further increasing a company's resilience to complex and unpredictable market fluctuations, while at the same time being able to flexibly take advantage of opportunities that arise in more favorable market conditions, has become the greatest challenge and most important task for management in chemical production.
Ensuring cybersecurity is one of the top issues in terms of resilience, as the Horváth study shows. According to the respondents, consistent liquidity management, improved performance and risk management, streamlining processes and improving cost and revenue structures are also important. But the list does not end there. There is also the further development of the corporate culture to secure human resources, the revision or realignment of strategy and business models and - closely related to this - ensuring environmental sustainability.
Green transformation is not being called into question - but the framework conditions are
The chemical industry is united behind the EU and German government's climate protection targets. However, the transition period until green energy is available in sufficient quantities and at competitive prices is considered a major feat. Increasing energy prices and rising CO2 costs, particularly in Germany, are not considered to be in line with the market. Regulation, product requirements and reporting obligations also pose major challenges for companies.
More than 90 percent fear new requirements and thus continued or increased market uncertainty. Rising energy and CO2 costs are cited by 80 percent as a major challenge. In addition, many respondents see rising product standards as critical for business, for example with regard to CO2 intensity (71%).
When asked about measures to solve ecological challenges and accelerate the energy transition, optimizing energy efficiency was mentioned most frequently (83%). A further 77% focus on the increased use of renewable energies in order to implement the decarbonization of their own company. A relocation of energy-intensive production is currently planned by 44% of companies. "That's not a majority, but almost every second company," warns chemicals expert Peter Hartl from Horváth. Cost discipline is therefore still the order of the day in order to secure the cautiously positive growth path.
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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