The German plastics processing sector rebounded in 2010 with 14 percent sales growth, reaching 51.3 billion euros ($74.3 billion).
The strong 2010 followed two weak years a drop of 14 percent in 2009 and growth of only 2 percent in 2008.
Germany's processing sector came close to the record level of sales achieved in 2008 52.3 billion euros. Production volume rose in 2010 by 7 percent, to 26.9 billion pounds. It, too, was still below the record level of 28.2 billion pounds in 2008.
GKV, the German trade association for plastics processors (Gesamtverband Kunststoffverarbeitende Industrie eV) revealed the 2010 results at a March 9 news briefing.
Exports increased by 15.5 percent to 18.3 billion euros ($26.5 billion), reversing the 16 percent drop in 2009. Sales to the domestic market grew slightly less, up 13 percent to 33 billion euros ($47.8 billion), compared to a 12.5 percent decline in 2009.
GKV President Bernd-Otto Kruse commented: The economy had clearly already started to grow again in Asia in the second half of 2009, but the rapid growth in 2010 was hardly to be foreseen. As much as the free fall had been unprecedented, so too was the comeback.
Kruse put the results in the context of the 3.6 percent growth in German gross domestic product in 2010, the fastest economic growth since the reunification of the country more than 20 years ago. He pointed out that the plastics processing industry has returned to its tradition of outpacing the overall economy. That was not the case in 2009, when German GDP shrank by 5 percent, while turnover in the plastics sector fell more, by 14 percent.
The fastest growth in 2010 came at producers of technical parts, primarily for the automotive, electrical and electronics industries, climbing 22.7 percent to 11.9 billion euros ($17.2 billion), compared to a 23 percent decline in 2009. But volumes grew less strongly in 2010 for the sector, by 10 percent to 4.85 billion pounds. The sector's fortunes are closely tied to those of the auto industry, which accounts for two-thirds of technical parts sales.
Packaging sales rose by 14 percent to 12.2 billion euros ($17.7 billion), reversing a 14.4 percent decline in 2009. Volume grew by 10 percent to the same level as in 2008, 9.04 billion pounds, with packaging film accounting for around 3.75 billion pounds.
The building industry had moderate 5 percent growth in 2010 to 10.8 billion euros ($15.6 billion), but had suffered less than the other sectors in 2009 with a lower 7.3 percent decline. Kruse expressed concern, however, about the industry suffering now in some countries such as Spain and Portugal, following their earlier overheated property booms.
Kruse said cost pressures need to be passed through more frequently than in the past. Although he praised the German government for its bureaucratic handling of short-time working needs during the crisis, he was critical of the government's energy policy.
A surcharge applied to all electricity bills designed to raise funds to develop energy from renewable sources puts Germany at a severe disadvantage with other countries as a production location in the medium term, Kruse said. This is most apparent with German energy costs double those of France, he added.
Kruse also said he is not concerned about actions in other countries to ban or restrict plastic bags because the Dual System Deutschland was introduced around 20 years ago to manage collection and recycling of post-consumer waste.
There are no amounts of plastic bags flying around in Germany in quantities worth mentioning. The question of a ban does not even arise, as there is no problem, he said.
On the other hand, Kruse stressed that GKV, through the European Plastics Converters Association, supports projects aimed at cleaning the seas and avoiding their contamination with plastics waste.
He praised developments in Germany with lightweight car construction using carbon-fiber composites. Those efforts are making a significant contribution to sustainability, he added.
Looking ahead by referring to the annual GKV survey of its members, Kruse pointed to average 83.4 percent capacity utilization and order levels averaging 9.3 weeks of production, compared with 6.3 weeks at the beginning of 2010.
The survey showed 87 percent of the firms increased sales in 2010, and 72 percent expect higher sales in 2011. Kruse said those positive signs are corroborated by 28 percent of the companies stating they will invest in expanding capacity in 2011.
Kruse looked ahead to likely 2011 results by saying German processors should be able to regain the level of sales achieved in the record year of 2008, which would require growth of just 2 percent.
He was not prepared to give a firm forecast, however.
I would like to talk one year from now of more growth in 2011, but I cannot be sure, he said.