Even if lower than forecast, German plastics processors report positive 2014 results and good 2015 prospects, but energy cost concerns continue.
German plastics processors generated record sales in 2014, growing 2.6 percent to 59 billion euros. The growth was slightly higher than the 2.4 percent in 2013, outstripping German GNP growth again, the industry's GKV trade association announced at its annual results briefing on Feb. 18.
The volume of material processed grew slightly faster than sales, by 3 percent to 13.6 million metric tons.
But GKV President Dirk Westerheide said growth was stronger in the first half 2014, especially in the first quarter. The number of employees grew 2.6 percent to 311,000 in 2014, breaching the 300,000 level for the second time, Westerheide said.
While packaging, consumer goods and technical parts grew, there was “sideways movement” in the building industry. The economic crisis in Russia slowed down the sector's growth in the second half, Westerheide said.
While not committing to specific figures when looking ahead to 2015, Westerheide stated “with required efforts and some luck, we will be able to announce further record results in turnover and the number of employees on Ash Wednesday 2016. Assuming suitably favorable background conditions, a turnover increase of the same order as in 2014 should be possible in 2015.”
He supports this prediction with the latest survey, in which 63 percent of responding GKV members said they expected rising sales in 2015, compared with 30 percent expecting no change and only 7 percent a reduction.
In 2014, 67 percent said they had increased sales, 23 percent no change and 10 percent reported a reduction.
But there are clouds on the horizon. While 40 percent of those surveyed expect increased profit in 2015, 47 percent no change in profits and just 13 percent reduced profit, Westerheide said high electricity costs continue to be a problem in retaining competitiveness. Even though the government reorganized the EEG (Erneuerbare Energien Gesetz) renewable energy law in 2014, Westerheide said experts foresee a further marked increase in the EEG subsidy surcharges on electricity bill in the coming years.
Most plastics processors benefited from a slight reduction in the EEG surcharge from January 2015, but from “a very high level in 2014.” But hardly more than 2,000 companies with particularly high electricity consumption receive “with good reason” a lower EEG surcharge. While Westerheide recognizes some of these are plastics processors, “the great majority pay the surcharge, just as every private electricity consumer does.”
Westerheide said for many of these companies, the annual EEG surcharge is like a double-digit percentage pay increase for staff.
Hardly any other country increases electricity costs to such a degree on account of renewable energy expansion, Westerheide said. So financing Germany's ambitious renewable energy targets should be a task for society at large and financed from that source, not from electricity consumers alone, Westerheide said.