INTERNATIONAL BUSINESS
West German Chemicals Make Rapid Gains West Germany's chemical industry continues strong. As Hans Albers, president of the country's chemical industry association (Verband der Chemischen Industrie), puts it, "1985 without doubt was a good year, which brought us much light and little shadow/' Albers, who is chairman of BASF, made the comment during his first presidential address to the association in Frankfurt. During the coming two years, he will be the key spokesman for his country's chemical industry, which is Western Europe's strongest. Statistics that Albers cites are good reason for his ebullience. Last year's sales for the West German chemical industry rose 6% from 1984 to an estimated $61.5 billion ($1.00 = 2.44 deutsche marks on Dec. 31). Of this total, chemical sales within West Germany were $34 billion {55% of the total), up 5%, and sales outside the country, $27.5 billion (45% of t h e total), u p 8%. The n u m b e r employed grew 1% to 557,000. As for international trade, exports advanced 8% to $31.6 billion, and imports increased 12% to $18.4 billion. Domestic demand (total sales plus imports, less exports) was 8% ahead of 1984's to $48.4 billion. Chemical production last year rose 3% from the previous year, reaching an index level of 112 (1980 = 100). Chemical prices also advanced 3% to an index level of 122. Albers points to several factors that contributed to the good showing for the industry. One was the gain in momentum of West Germany's economy, coupled with the stable condition of the chemical business worldwide. The high level of spending on research and capital investment in chemicals also is paying off, he says. The West German industry's total outlay in 1985 amounted to $6.15 billion, 10% of the year's sales. This year it will be closer to $7 billion. "Our innovative sector has adapted successfully to the change in the
world's economic environment," Albers remarks. "Difficult areas were streamlined, successful ones consolidated, new ones taken up." Increasing attention is being focused on biotechnology studies. Indeed, the chemical industry association itself is promoting this effort t h r o u g h its Fund for Biological Chemistry established three years ago. "The very successful cooperation with the [West] German Ministry of Research has induced us to continue our participation in this project," Albers notes. "We will contribute $4.92 million to the biotechnology program of the government, which has budgeted $8.20 million for the coming three years." Practically every major West German chemical company has established collaborative biotechnology research programs with leading German universities. For obvious financial reasons, this isn't possible for the smaller concerns. To help these tap latest developments in the field, the industry association is setting up an arrangement to open an avenue of communication between its
small- and medium-sized member firms and the Society for Biotechnology Research in Braunschweig. "In connection with biotechnology, vegetable products, such as sugar and starch as well as vegetable oils and fats, will gain in importance as chemical raw materials for specialty products," Albers says. "However, an essential prerequisite to their utilization is that these products be available at world market prices, not at the substantially higher prices that apply within the framework of the European Economic Community's market regulations." Albers hastens to add that "we do not consider vegetable raw materials an alternative for our large-scale petrochemicals production." The relatively high value of the dollar against the West German mark, which prevailed until about mid-1985, favored the export of German chemicals to dollar trading zones. Albers acknowledges that the dollar's 20% or so weakening against the mark during the past few months "will certainly affect our business situation. North American competitors will try to regain lost ground." The U.S. is West Germany's leading chemical trading partner outside Europe. In the first nine months of last year, chemical sales to the U.S. amounted to $1.65 billion, 12% more than in the like 1984 period, and some 6% of the country's total chemical exports. Chemical imports from the U.S. were valued at $1.41 billion, a 17% advance from 1984. "As an export-oriented industry, our sector is dependent on world trade that is not confined by customs duties or other regulations," Albers insists. But in an obvious reference to petrochemicals arriving from Saudi Arabia's new plants, he adds: "This liberal trade policy should not entail that West Germany or EEC, our major export market, become a priority target for imports of products from petroleumexporting countries." Dermot O'Sullivan, London
I.
Albers: innovative sector has adapted
February 3, 1986 C&EN
13
