Germany chemical industry shifting more investments to US: VCI
26 November 2013 14:44
LONDON (ICIS)--Germany’s chemical industry keeps increasing its investments in the US, attracted by that country’s low energy costs on the back of growing shale gas production, German chemical industry trade group VCI said on Tuesday.
In 2012, German investment in new chemical plants or expansions in the US rose 54% to €3.2bn ($4.3bn), the group said.
The US now accounts for 41% of the German chemical industry’s foreign investments, up from 28% in 2005.
The year marked the first time since 2001 that firms' foreign investments exceeded their domestic investments, VCI said.
Overall, Germany’s chemical industry investments abroad rose 25% year over year to €7.7bn in 2012, while domestic investments stagnated at €6.3bn.
"Our chemical companies are facing significant pressure in Germany, because of the increases in energy costs,” said VCI general manager Utz Tillmann.
“Abroad, and particularly in the US, the firms obviously find better conditions for their production, helping them to preserve their competitiveness,” he added.
Tillmann said that Germany needed to ensure that its energy transition (“Energiewende”) to exit nuclear power and build up renewables remains affordable for producers, otherwise the industry’s growing investments abroad would continue.
Germany’s electricity costs are 2.5 times as high as in the US, and natural gas prices are 3.0 times as high, according to VCI. The Frankfurt-based group represents about 1,650 chemical firms.
($1 = €0.74)
Source: ICIS News
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