THE GERMAN CHEMICAL INDUSTRY DECEMBER 15, 2017 Dr. Thorsten Bug, Senior Manager Chemicals
Agenda 1. The Chemical Industry Globally 2. The German Chemical Industry 3. Opportunities for Chemicals Producers in Germany Main sources: Cefic: The European Chemical Industry Councel, Brussels, www.cefic.org Destatis: Statistisches Bundesamt (engl.: Federal Statistical Office), Wiesbaden, www.destatis.de VCI: Verband der chemischen Industrie (engl.: German Chemical Industry Association), Frankfurt/Main, www.vci.de Germany Trade & Invest www.gtai.de 2
Global chemical revenue With strong growth rates in the 10-years-period 2006-2016, the Asian Chemical Industry has doubled their share in global revenues. 32% 24% 18% 57% 16% 7% 4% NAFTA Europe 29% Japan 3% 1% Africa, Australia, Middle east Asia 5% 4% Latin America Quelle: Cefic, Facts and Figures 2017 Global revenue in percentage share 2006: EUR 1,803 billion 2016: EUR 3,360 billion Germany Trade & Invest www.gtai.de 3
Global Chemical Revenue Despite China s strong growth, Europe continues to be a relevant market. 2006: EUR 1,803 bn CAGR = 0,4% EUR 573 bn (32%) EUR 598 bn (18%) 2016: EUR 3,360 bn Europa Asien NAFTA Japan Andere Quelle: Cefic, Facts and Figures 2017 Germany Trade & Invest www.gtai.de 4
Global Chemical Revenue Germany is the world s third largest chemical market, being surpassed only by China and USA in terms of revenues. Chemical Revenue in EUR billion, 2016 1500 1000 500 0 China USA Germany Japan South Korea India France Taiwan Brazil Italy Source: Cefic, Facts and Figures 2017; Total revenue globally 2016: EUR 3,360 billion. Germany Trade & Invest www.gtai.de 5
EUR billion European Revenues With a share of 29% in 2016, the German chemical industry has consolidated it s leading role in Europe during the recent years. European (EU-28) Chemical Industry Revenues in EUR billion, 2011 2016 600 500 400 300 92 93 90 89 36 37 38 36 38 39 38 38 46 38 38 40 51 55 50 49 55 52 52 52 76 88 35 35 36 36 41 36 47 46 50 50 Rest of EU-28 Belgium Spain UK Netherlands 200 80 78 77 78 73 71 Italy 100 164 161 165 154 149 145 France Germany 0 2011 2012 2013 2014 2015 2016 Quelle: VCI, Chemiewirtschaft in Zahlen 2017 Germany Trade & Invest www.gtai.de 6
Agenda 1. The Chemical Industry Globally 2. The German Chemical Industry 3. Opportunities for Chemicals Producers in Germany Main sources: Cefic: The European Chemical Industry Councel, Brussels, www.cefic.org Destatis: Statistisches Bundesamt (engl.: Federal Statistical Office), Wiesbaden, www.destatis.de VCI: Verband der chemischen Industrie (engl.: German Chemical Industry Association), Frankfurt/Main, www.vci.de Germany Trade & Invest www.gtai.de 7
Number of employees in Thousand Revenues in Euro billion The History of the German Chemical Industry Within 50 years, revenues increased by a nominal 5.4 % (real 3.1%) on average a year. This resulted in a 14-fold productivity increase. Revenues and Number of Employees of the German Chemical and Pharmaceutical Industry, 1960-2010 700 180 600 598 568 568 160 500 458 470 415 140 120 400 100 300 200 100 0 171 135 100 65 12 30 1960 1970 1980 1990 2000 2010 80 60 40 20 0 Quelle: VCI, 2013. Details: 1960 without Saarland. From 1964 on including West-Berlin; 1970, 1995, and 2008 new Classification. From 1991 Germany reunified. Germany Trade & Invest www.gtai.de 8
in % German Chemical Companies Structure The industry is dominated by small companies, whereas the lion s share of revenues are raised by large corporations. Number of Chemical Companies, Employees and Revenues by Company Size, 2016 80 70 72 69 60 58 50 40 34 30 20 25 27 10 0 8 3 4 Number of companies Employees Revenues 1-49 employees 50-499 employees > 500 employees Source: VCI, Chemiewirtschaft in Zahlen 2017, Table 18b. Germany Trade & Invest www.gtai.de 9
Chemical Exports Germany is the second largest exporter of chemicals globally. Chemical Exports by Country in EUR billion, 2016 120 100 80 60 40 20 0 USA Germany China Belgium South Korea The Netherlands Japan France Saudi Arabia Singapore Source: VCI, Chemiewirtschaft in Zahlen 2017, Table 61b. Germany Trade & Invest www.gtai.de 10
German Chemical Exports European countries are dominating German Chemical Exports. EU 28 European non-eu (without Germany) 60% 10% 17% 7% Asia NAFTA 3% Latin America 3% Rest of the world (ROW) Source: VCI, Chemiewirtschaft in Zahlen 2016, Table 42b. Germany Trade & Invest www.gtai.de 11
EUR billion Chemical Market Segmentation Fine and specialty as well as basic chemicals continue to constitute the backbone of the German chemical production market. Chemical Market Segmentation by Revenues in EUR billion, 2010 2016 50 40 30 20 10 0 Petrochemicals Fine & Speciality Chemicals Polymers Anorganic Basic Chemicals Detergents & Care Products 2010 2011 2012 2013 2014 2015 2016 Source: VCI, Chemiewirtschaft in Zahlen 2017. Germany Trade & Invest www.gtai.de 12
Thousand tons German Chemicals Production Despite the economic downturn in 2009, the Basic Chemicals output in Germany remained almost steady since 2000. Production Volumes of Basic Chemicals in Germany, 2000 2015 8.000 6.000 4.000 2.000 0 2000 2005 2010 2015 Source: VCI, Chemiewirtschaft in Zahlen 2016, Table 4a and 4b; Oxygen in million m 3 under normal conditions.. Germany Trade & Invest www.gtai.de 13
Germany s private R&D spending German chemical industry R&D expenditure was EUR 4.3 billion in 2016, making the sector the fifth strongest in Germany. R&D Expenditure by Industry, 2006 2016 70 60 50 40 30 20 10 3,7 3,5 5,4 4,5 4,7 4,8 10,6 9,2 19,8 21,0 3,6 3,5 3,6 4,7 4,8 5,1 5,1 5,1 4,9 9,9 8,3 8,5 23,3 21,8 23,3 4,0 3,9 3,7 5,8 6,0 5,3 5,5 5,8 5,9 10,1 10,5 9,4 25,7 27,2 28,1 4,3 5,8 6,3 10,8 32,0 4,2 4,3 6,2 6,5 6,0 6,2 11,0 11,3 34,4 34,8 Chemicals Pharma Mechanical engineering Electrical engineering Automotive 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: VCI: Chemiewirtschaft in Zahlen 2017, Table 48. Germany Trade & Invest www.gtai.de 14
Chemical Patents Germany is number two spot for European chemical patent registrations, only surpassed by the US. European Chemical Patents granted by the EPO by Source Country in %, 2007 2015 100 90 80 70 60 50 40 30 20 10 13 14 14 16 16 4 4 4 3 4 4 4 3 4 4 4 4 3 5 3 4 5 5 5 5 7 7 7 6 7 17 15 17 17 15 23 21 20 19 18 24 26 25 25 27 ROW China Italy Netherlands UK Switzerland France Japan Germany USA 0 2007 2009 2011 2013 2015 Source: European Patent Office (EPO) Germany Trade & Invest www.gtai.de 15
Electricity generation In the last 25 years Germany got greener as Renewables has grown from 2% up to 19%. Nuclear energy decreased by 1/3 in the same period. Electricity Generation in Germany by Energy Carrier in %, 1990 2015 100% 2 3 3 6 8 8 9 11 12 19 Renewables 75% 24 23 24 21 12 18 10 20 Natural Gas 50% 31 32 35 32 28 20 Hard Coal Nuclear Energy 25% 33 30 27 26 25 29 Lignite 0% 1990 1995 2000 2005 2010 2015 Other sources Source: AG Energiebilanzen e.v. (http://www.ag-energiebilanzen.de/) Germany Trade & Invest www.gtai.de 16
Investments in Europe Thanks to market attractiveness, most chemical investments in Europe for the period 2011 to 2015 occurred in Germany. Number of Investments in Europe, 2011 2015 300 250 200 150 100 50 Chemicals Plastics Rubber Quelle: fdi markets. Total number of investments (1338): Chemistry (651), Plastics (536), Rubber (151). Graph represents 89% of all investments. Germany Trade & Invest www.gtai.de 17
The Chemical Cluster Landscape Chemical Cluster offer added value to their members: as networking platform for R&D institutes, companies, and authorities within the region through strategic alliances with international chemical sites in Europe, Asia and the US strengthen the cluster members global competitiveness Germany Trade & Invest www.gtai.de 18
Agenda 1. The Chemical Industry Globally 2. The German Chemical Industry 3. Opportunities for Chemicals Producers in Germany Main sources: Cefic: The European Chemical Industry Councel, Brussels, www.cefic.org Destatis: Statistisches Bundesamt (engl.: Federal Statistical Office), Wiesbaden, www.destatis.de VCI: Verband der chemischen Industrie (engl.: German Chemical Industry Association), Frankfurt/Main, www.vci.de Germany Trade & Invest www.gtai.de 19
Raw Materials Supply Germany s chemical industry regions are well connected to the European pipeline grid. Infrastructure of raw materials supply: Crude oil via pipelines from: Russia the Mediterranean Sea France the North Sea Crude oil processing via: 14 refineries 8 steam crackers Pipelines for: ethylene and propylene natural gas hydrogen carbon monoxide Germany Trade & Invest www.gtai.de 20
Phletora of Logistics Additionally to the pipeline grid, Europe s longest autobahn, rail and waterway network connects Germany with its nine neighboring states. Autobahn 12,550 km Railways 40,330 km Waterways 7,450 km Seaports 9 Major Airports* 12 Germany Trade & Invest www.gtai.de 21
Chemical Parks Plug & Play concept Chemical Parks Advantages: About 30 chemical parks offer costefficient and unique benefits through: excellent infrastructure chemical raw materials via pipelines gases and steam via pipelines secure energy supply Site operators offer expertise and services from one source Investors choose the services from site operator that suits their business model best Source: Factsheet Chemical Parks in Germany, Germany Trade & Invest, February 2017 Germany Trade & Invest www.gtai.de 22
Chemical Parks Selected Locations A B A B Germany Trade & Invest www.gtai.de 23
Chemical Parks Selected Locations A B C D C D Germany Trade & Invest www.gtai.de 24
Chemical Parks Selected Locations A B C D E E F F Germany Trade & Invest www.gtai.de 25
Germany Trade & Invest Contact Germany Trade & Invest Foreign Trade and Inward Investment Promotion Agency Dr. Thorsten Bug Senior Manager Chemicals T. +49 (0)30 200 099-603 Thorsten.bug@gtai.com Berlin Headquarters Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 www.gtai.com 2017 Germany Trade & Invest All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided. Germany Trade & Invest www.gtai.de 26