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November 20, 1995 01:00 AM

GERMAN PROCESSORS SHOW SOME PROGRESS

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    DUSSELDORF, GERMANY - Germany's plastics processors have full order books, rising export sales and high plant-utilization rates - and still are not making enough money. That is the judgment of Nor-bert Wagner, president of Gesamtverband Kunststoffverarbeitende Industrie e.V. (GKV), Germany's Federation of the Plastics Processing Industry. Wagner, in a prepared statement circulated at the recent K'95 exhibition in Dusseldorf, blamed the industry's poor profitability primarily on rapid rises in raw materials costs, which for some resin grades have soared by as much as 80 percent.

    Industry officials claim that Germany's plastics processors-most of which are small or medium-sized companies-have been unable to pass along many of these price increases, given the purchasing strength of many of their large customers.

    Additionally, Wagner noted, the federation is worried that the competitiveness of most of its membership is being compromised by high worker wages and wage-related costs, as well as by high taxes. He said he sees these factors as ``a main threat to Germany's viability as a manufacturing base.''

    ``Poor returns mean a short-age of funds for capital invest-ment and insufficient financial latitude for innovation,'' Wagner said.

    Despite such warnings, Germany's plastics processing industry is posting some otherwise-strong figures.

    In a statement issued at the K show, Walter Steinbeck, deputy chairman of the show's exhibitor advisory council and chairman of extruder manufacturer Windmoller & Holscher, noted that the GKV is projecting growth for German processors of 5-6 percent in 1995, both in volume processed and in sales value.

    These forecasts come on top of 1994's progress, which Steinbeck said included an increase in sales of German plastics products of 7.4 percent, to just less than 66 billion deutsche marks ($47 billion), compared with the previous year. Of that, foreign sales accounted for about 21 percent, up 12.4 percent over 1993.

    Companies in the former West Germany saw their 1994 sales rise 5.5 percent, to DM 62.4 billion ($44.6 billion), while firms in the former East Germany boosted sales by 61.9 percent, to DM 3.36 billion ($2.4 billion).

    Though 1993's trend toward sharply reducing jobs in the processing sector finally slackened early last year, Steinbeck said that in Germany as a whole, the number of plastics processing employees dipped 1.7 percent in 1994 to about 290,800. That estimate is based on figures supplied by about 2,800 companies with more than 20 employees each, he noted.

    A survey taken recently of German plastics processors revealed that many companies are reasonably optimistic about the general economy and increasingly willing to invest, Steinbeck noted, even though many are waiting to assess the effects that reduced consumer purchasing power will have on their own businesses.

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