The Germany Trade & Invest (GTAI) will visit Expoquimia to know his new orientation
GTAI: “An international platform with a global vision of the chemical can interest to the German companies”
The next edition of Expoquimia, Eurosurfas and Equiplast marks a turning point for the Meeting of the Chemicals Applied of the Mediterranean. From 2014, this event evolves and transforms to turn into the World Chemical Summit, that connect science and industry for a global market. In this sense, and by obvious reasons, Germany is a strategic enclave so much from the point of view of the offer as of the demand for this new stage, more international, of Expoquimia, Eurosurfas and Equiplast. The
BASF-The Chemical Company.
Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities in the German market. It provides information on foreign trade to German companies that seek to enter foreign markets.
Currently, Germany is still the most dynamic economy in the European Union. Do you think the German market will be the motor of the European economic recovery?
With a share of 21% of the EU-28’s GDP, Germany has a major influence on the European economic recovery. It is also Europe’s largest market. With economies struggling in Southern Europe, Germany remains Europe’s growth engine. The German government forecasts an economic growth of 1.7% this year. The EU commission expects a 1.9% GDP growth for 2015.
Therefore about 50,000 foreign companies in Germany and many foreign investors appreciate Europe’s largest market as a safe haven for investments. Between 2008 and 2011, Germany’s inward FDI stocks grew by more than 14% up to EUR 549 bn.
Many international business location rankings underline Germany’s global attractiveness. The World Economic Forum’s latest Global Competitiveness Yearbook ranks Germany fourth and according to Ernst & Young’s European Attractiveness survey, Germany is ranked as Europe’s most attractive investment location.
Your country is the leader in many industrial sectors, especially in the chemical, the surface treatment and plastic sector. What is their actual situation?
The German chemical industry is still waiting patiently for the recovery of the global economy generally, but irrespective of that the export-oriented branch is reckoning with a production increase of 1.5% and a turnover boost of 0.5% to EUR 187.7bn. The sinking chemical prices – of about 1% - are responsible for the poor turnover growth. The German Institute for Economic Research (DIW) foresees chemical production rising 3.5% in 2014, with turnover also rising by 3%. These expectations are based on – among other things – positive competition in the industry and foreign trade. Employment in the industry continues to be a positive and currently stands at 436,500 jobs according to the Association of the Chemical Industry (VCI). Germany remains the EU leader in terms of FDI projects in chemicals, and rubber and plastics.
Furthermore, the German companies have shown in the past a big interest to expand into other countries, e.g. in Spain. What does Spain offer to make the market so attractive? Which role does Germany Trade & Invest play?
After the onset of the economic crisis Spain set resolute reform policies in motion, primarily covering three areas: fiscal consolidation (with budget deficit reduction and debt-staunching), financial market reform (with a restructuring of the banking sector and recapitalization of banks) and comprehensive structural reform (including labour market reform, liberalization measures, set-up of a unified domestic market, promotion of entrepreneurship). These policies bore fruit (most notably in the export sector) even though the domestic market remained relatively weak.
Spain offers opportunities for joint ventures and made-to-order production despite the crisis because there are many capable industrial companies. There is also opportunity for purchasing stakes or even taking over companies because of strained liquidity. And there is the concept of Spain’s ‘bridging function to South America to bear in mind, something German companies could well use.
The chemical sector in Spain counts with a huge number of big German companies. Which is the valuation of their presence in our country?
German chemical companies are well-represented in Spain. Among them are the likes of BASF and EVONIK, while there are also pharmaceutical companies such as Bayer, Boehringer Ingelheim, Grünethal and Medinsa. The entire chemical industry is heavily export-oriented; last year saw significant investment in plants and production capacity expansion. The German chemical industry is among the most meaningful investors in R&D and innovation.
In the next edition we take first steps in order to convert the Mediterranean Meeting of the Applied Chemistry (Expoquimia, Eurosurfas and Equiplast) into the World Chemical Summit. Do you think that German companies have interested in this approach?
This is a really big summit which could create a lot of interesting opportunities within the industry in the future. We’ll be at the next edition of the Expoquimia, Eurosurfas and Equiplast in order to get the first impressions of the development.
Of course, we will have to wait a little bit to evaluate its relevance for the companies. An international platform with a global vision of the chemical industry could be a chance for German companies to bring their know-how and to pool knowledge with other industry leaders, so they could work together. Furthermore, the World Chemical Summit could help them on their way to trade and investment agreements. This is a project in long term that should be kept in mind.
To end up, do you consider the Spanish companies as a good ally, who offer business opportunities for German companies?
This question can be answered with a succinct ‘yes’. Many German companies have enjoyed good experiences in partnerships with Spanish companies, which can only be the reason for the persistent interest in the Spanish market of German companies. The German Chamber of Commerce for Spain has, over the past few years, set up a series of successful company networking events across many industries (renewable energy among them). The health economy and food and nutrition sectors are on the program for 2014.
There are further reasons as to why Spanish companies are thought of as ‘good allies‘ for German companies and create partnerships which prove successful in practice. Spain is increasing in importance as a buying market as a part of the ‘near sourcing’ concept. This is why the Chamber of Commerce, together with the Federal Association Materials Management, Purchasing and Logistics (BME) has produced a directory listing capable Spanish companies. German branches in Spain also become involved as sub-contractors in major contracts won by large Spanish infrastructural companies. German subsidiaries, together with large Spanish companies (for example in infrastructure or engineering) can thus tap into third countries.
The chemical industry German is expecting with patience to the recovery of the economy to global level, but, in spite of this, the exports have increased 1,5% and the volume of sales has grown 0,5% until arriving to the 187,7 trillion euros. The sinking of the prices of the chemical products (1%) is the cause of the poor growth of the turnover. The German Institute of Economic Investigation foresees that the chemical production grow 3,5% in 2014, what will cause an increase of the turnover in 3%. Among others factors, these forecasts base in an improvement of the competitiveness of the industry to local level and of the external trade. Regarding the employment, this remains stable with 436.500 places of work, according to the German Association of the Chemical Industry. Besides, Germany keeps on being the leader of the European Union in projects of direct foreign investment in the chemical sectors, of the plastic and of the rubber.
