Germany is the engine that drives the European economy — and when it comes to the plastics industry, German machinery is a potent force, an export-driven dynamo whose technology is admired the world over.
VDMA, the German Engineering Federation — through its German Plastics and Rubber Machinery Association — represents the sector that was on full display this week at Fakuma 2014. Thorsten Kühmann, managing director of the association, answered questions posed by Plastics News senior reporter Bill Bregar about the economies of Germany and Europe, export markets and “green” issues.
Machinery demand is brisk in Germany and Europe, Kühmann said. That sets the backdrop for Fakuma 2014.
In 2006, Kühmann was named head of VDMA, as well as secretary general of Euromap, the European Committee of Machinery Manufacturers for the Plastics and Rubber Industries. Both VMDA and Euromap are based in Frankfurt, Germany.
Before moving to plastics machinery, Kühmann had been deputy managing director of the mining equipment trade group at VDMA. He was born in Brazil to German parents, and grew up in Kenya — giving him a global outlook. Before joining VDMA, Kühmann, a lawyer, worked for a small American consulting firm.
Q: In June, VDMA reduced its forecast, predicting a 3 percent sales gain for 2014. VDMA also has said it expected a 4 percent increase in 2015. Has your outlook changed since that time?
Kühmann: For 2014, we are anticipating a drop of 1 percent, and for 2015 we still predict growth of 4 percent.
Q: At that June mid-year press briefing, VDMA officials said machinery sales were strong in Germany and in eurozone, while non-eurozone European countries were down 1 percent. Is that still the case? How is German demand for machinery going right now?
Kühmann: Orders from German clients continue to grow on a high level. Their increase from January through July 2014 was 22 percent compared to 2013. Euro countries have climbed by close to 9 percent whereas orders placed by overseas customers have slowed down by 2 percent in the same period.
Q: Can you give a breakdown of export market countries — from biggest to smallest? What is the most up-to-date information?
Kühmann: China remains the top destination for German exports of plastics and rubber machines, although deliveries have dropped by close to 8 percent from January through June 2014 compared to first half year 2013.
The United States (at plus 0.1 percent) remains stable No. 2 on a high level, followed by Poland (10. 2 percent) climbing from rank four to three. Russia dropped back significantly (-36.5 percent) falling to rank four on the export list. Deliveries to the Czech Republic (52 percent), France (-6.6 percent) and Italy (18 percent) reach roughly the same volume as Russia. Ranks eight to 10 go to United Kingdom (-17.3 percent), Mexico (-11. 9 percent) and Switzerland (8.6 percent).
In a nutshell — German deliveries to all destinations have dropped by 5.3 percent in the first half year 2014 compared to the previous year. At the same time, local deliveries climbed by about 9 percent and compensate some export losses.
Q: Has the geopolitical turmoil over Russia and Ukraine hurt your export business to Russia in 2014? We read in the news, for example, how the conflict has negatively impacted the German automotive industry.