VERBAND DER CHEMISCHEN INDUSTRIE e.V.

The Chemical Industry in Germany Indo-German SME Forum 31st May – 01st June, 2013 Norbert Theihs

Chemical Parks in Germany There are many good reasons to invest in a chemical park in Germany: 

Chemical parks provide the platform for the success of Germany s chemical industry



The chemical park concept is innovative and unmatched anywhere else in the world



Investors find optimum economic conditions in chemical parks



Chemical park operators offer investors a comprehensive range of services



The chemical park concept offers investors individual solutions for their business models May 2013 The Chemical Industry in Germany page 2

I.

Germany – the Investment Location

II.

The Chemical Industry in Germany

III.

Chemical Parks

IV.

Successful Examples

V.

Contact

May 2013 The Chemical Industry in Germany page 3

Germany – the Investment Location Germany is the geographical and economic center of Europe 1

GDP (2010, in € billion)

Population (2010, in million)

World*

46,603

100

6,915

EU 27

12,284

26

501

2.499

5

82

11,057

24

309

4,122

9

127

Germany

USA

Japan

1 Gross

Share in global GDP (2010, %)

Domestic Product, *Data from World Bank 2011; Japanese Office of Statistics, 2011; Eurostat, 2011; US Census Bureau, 2011

May 2013 The Chemical Industry in Germany page 4

Germany – the Investment Location Germany is the most attractive domestic market in Europe Consumption Expenditure (2009, in € billion) 

Germany has Europe s largest gross domestic product (GDP)



Germany is the largest sales market in Europe



Germany has the highest population in Europe

May 2013

Source: Institute for Management Development IMD, 2011; Germany Trade & Invest, 2011

The Chemical Industry in Germany page 5

Germany – the Investment Location Germany is the top location for investments in Europe Attractiveness of the location (%)1



Germany is Europe s leading investment location



65% of companies considering investment projects in Europe plan to invest in Germany



The presence of foreign companies in Germany increases constantly

More than 410 foreign chemical companies with sales of more than € 72 billion and about 147,000 employees are present in Germany. May 2013

Respondents could give multiple answers, Ranking from US – point of view: 100% = hightest points Source: AmCham Business Barometer 2011; Deutsche Bundesbank, 2011 1

The Chemical Industry in Germany page 6

Germany – the Investment Location Foreign direct investment (FDI) in Germany s chemical industry is stable at high level for many years FDI-chemical industry in Germany (cumulated in € billion)



Foreign companies have continuously expanded their capacities in Germany



Foreign companies invested € 2 billion in Germany in 2008

45 39,4

40

37,5

35

32,8

30 25,7 26,6

23,9

25 20,6

20

23

23,9

15,7

15 9,9

10

11,1

9,1

5 0

Quelle: VCI, Publication: Chemical Industry in Figures, 2010

Foreign direct investment in the German chemical industry has more than quadrupled to € 39 billion over the last 15 years. May 2013 The Chemical Industry in Germany page 7

I.

Germany – the Investment Location

II.

The Chemical Industry in Germany

III.

Chemical Parks

IV.

Successful Examples

V.

Contact

May 2013 The Chemical Industry in Germany page 8

The Chemical Industry in Germany Germany is a very important sales market for chemicals in Europe Consumption of Chemicals in Europe (2009, in € billion) Spain 56

Poland 20

Great Britain 56

Rest of EU 156

Italy 83

Germany 105

Rest of Europe 91 France 107 Source: VCI, Publication: Chemical Industry in Figures, 2010

European Consumption of chemicals: € 674 billion (2009)

May 2013 The Chemical Industry in Germany page 9

The Chemical Industry in Germany The German chemical industry has maintained a leading role in Europe for many years 1995

Sales (in € billion)

Investment (in € billion)

Exports (in € billion)

R&D expenditures (in € billion)

1

2000

2008

Share of EU 27 (2009, %)

2009

EU 27-Ranking (2009)

112,3

135,0

183,0

158,1

24,1

1

5,8

7,3

6,51

----

22,51

1

51,8

76,6

138,0

134,2

24,9

1

5,3

7,1

7,12

6,51

24,31

1

Figures for 2007 2 Figures for 2006 Source: VCI, Publication: „Chemical Industry in Figures“, 2010

May 2013 The Chemical Industry in Germany page 10

The Chemical Industry in Germany The German chemical industry is the world champion in exports Chemical exports by country (2009, in € billion)

May 2013

Source: VCI, Publication: „Chemical Industry in Figures“, 2010

The Chemical Industry in Germany page 11

The Chemical Industry in Germany Europe is the most important market for the German Chemical Industry German chemical exports (2009, in € billion)

German chemical exports: € 134 billion (2009)

Source: VCI, Publication: „Chemical Industry in Figures“, 2010

May 2013 The Chemical Industry in Germany page 12

The Chemical Industry in Germany Germany is the biggest producer of chemicals in Europe A quarter of all chemicals produced in Europe came from Germany (2009, in %)1 Others 12,7 Germany 24,1

Ireland 5,4 Belgium 6,3 Netherlands 6,6

France 17,3 Spain 7,3 Great Britain 9,7 1

Share of total sales Source: VCI, Publication: „Chemical Industry in Figures“, 2010

Italy 10,6

Value of production in the EU: € 656 billion (2009)

May 2013 The Chemical Industry in Germany page 13

The Chemical Industry in Germany Innovative products make up more than 50% of chemical production in Germany Distribution of production according to chemical product groups (2009, %) Detergents and body care products: 8 Inorganic basic chemicals: 9

Fine and specialty chemicals: 25

Petrochemicals and derivates: 16

Pharmaceuticals: 24 Polymers: 18 Quelle: VCI, Publication: „Chemical Industry in Figures“, 2010

May 2013 The Chemical Industry in Germany page 14

The Chemical Industry in Germany Germany has the best workforce in Europe Employee qualification (2010, % of total number in the EU 27) 25

 Germany has the highest level of employee qualification in Europe  Advanced training and employee qualification are important success factors for the companies operating in Germany

20

15

 Stable social partnership

10

 Employees identify with their companies to a high extent  Agreement-oriented partnership between companies and trade unions

5

0

 High level of productivity with committed employees scientist1 1

Qualified workforce2

Respective share of the total number of scientists (superior education, university degree) in the EU 27 share of the qualified workforce (secondary education, post-secundary level, technicians and comparable non-technical professions) in the EU 27 Source: Eurostat, 2011 2 Respective

May 2013 The Chemical Industry in Germany page 15

The Chemical Industry in Germany Lowest number of strikes in Europe Days lost to strikes (annual average 2004-2008, per 1,000 employees)

May 2013

Source: Eurostat, 2009

The Chemical Industry in Germany page 16

The Chemical Industry in Germany In comparison with other European countries, Germany has stable labor costs Changes in labor costs in the chemical industry (2006-2009, %)

May 2013

Source: BAVC, 2011

The Chemical Industry in Germany page 17

The Chemical Industry in Germany Falling unit labor costs increase the competitiveness of companies in Germany Changes in unit labor costs (Total economy 2005-2010, %) Germany Netherlands Spain EU 27 France Great Britain Czech Republic Slovakia

Source: Eurostat 2011, inflation adjusted

May 2013 The Chemical Industry in Germany page 18

The Chemical Industry in Germany Rapid and dynamic recovery of the chemical business Chemical production in Germany 120

20

115

15

110

10

105

5

100

0

95

-5

90

-10

85

-15

80

-20 2002

2003

2004

2005

2006

2007

2008

2009

2010 May 2013

Seasonly adjusted; index 2005 = 100, annual percentage change Quellen: Destatis, VCI

The Chemical Industry in Germany page 19

The Chemical Industry in Germany Nearby university training strengthens research and development for the chemical industry and its applications 

58 universities to train young scientists for the chemical industry



Including 18 universities offering biochemistry and 15 universities offering food chemistry



24 universities of applied sciences offering chemistry

The intensive exchange between universities and companies ensures that German companies are able to hire top talents in science and engineering.

Source: German Chemical Society GDCh, 2007; Federal Ministry of Education and Research BMBF, 2008

May 2013 The Chemical Industry in Germany page 20

The Chemical Industry in Germany Nearby non-university research and development supports the chemical industry and its applications 76 non-university R&D facilities for the chemical industry: 

17 Institutes of Max Planck Society (MPG)



23 Institutes of Fraunhofer-Gesellschaft (FhG)



6 Institutes of Helmholtz Association (HGF)



5 Institutes of Leibniz Association (WGL)



15 Federal, national and independent R&D institutes. Germany has a range of universities, R&D facilities and companies that is among the leaders in the world.

Source: Federal Ministry of Education and Research BMBF, 2008; Germany Trade & Invest, 2009

May 2013 The Chemical Industry in Germany page 21

The Chemical Industry in Germany Germany is the top location for quality in research and development European granted patent registrations, chemistry1 (2009, absolute figures) USA

The number of patents underlines the success in research and development



Within Europe Germany is at the top of the list for patent registrations -proof that Germany is the top location for innovations

2,753

Germany

2,143

Japan

1,781

France

669

Switzerland

572

Great Britain

419

Netherlands

381

Italy

343

Sweden

168

Belgium

155 0

1



May 2013 1,000

2,000

Chemistry and Polymers; Source: EPO, 2010

3,000

The Chemical Industry in Germany page 22

The Chemical Industry in Germany Germany s outstanding infrastructure gives it logistical advantages

1

Country

Ranking 2007

Ranking 2010

Germany

3

1

Singapore

1

2

Sweden

4

3

Netherlands

2

4

Luxembourg

23

5

Switzerland

7

6

Japan

6

7

Great Britain

9

8

Belgium

12

9

Norway

16

10



Germany has the best transportation and logistics infrastrucutre in Europe



The road density is twice as high as the EU average



Transportation routes such as highways (12,000 km), rail (40,300 km) and waterways (7,500 km) with a total length of more than 60,000 km



Links to the world s markets via 64 seaports*, 15 inland and 19 passenger airports**



National pipeline network

Respondents could give multiple answers; * Figures correspond to the accounting cycle/size of ports and relevance of the ogistical areas; ** > 500.000 passengers Source: World Bank, 2010; Working Committee of German Passengerairport, Germany Trade and Invest, 2009

May 2013 The Chemical Industry in Germany page 23

The Chemical Industry in Germany Germany s outstanding infrastructure gives it logistical advantages 

All trans-European transportation routes across Germany



Excellent connections to the countries of Europe : 

Via the North and Baltic Sea routes to the UK, Scandinavia and the Baltic states



Road and rail network to Denmark



Many different links to the Benelux countries, France and Eastern Europe by road, rail and water



Road and rail links across the Alps to the Mediterranean and the Balkan region

Germany is linked with the markets in neighboring countries via a dense and well-developed network of transport routes.

Source: Germany Trade & Invest, 2009

May 2013 The Chemical Industry in Germany page 24

I.

Germany – the Investment Location

II.

The Chemical Industry in Germany

III.

Chemical Parks

IV.

Successful Examples

V.

Contact

May 2013 The Chemical Industry in Germany page 25

Chemical Parks Germany s chemical locations are connected to the European pipeline grid 

The diversified oil supply structure ensures a stable supply basis for the German chemical industry



Germany gets its oil from the Mediterranean, the North Sea and from Russia via pipelines



Pipelines for ethylene and propylene complement the supply structure for chemical parks



Chemical parks are connected to a network of pipelines for natural gas, naphtha, hydrogen, carbon monoxide and technical gases

Source: Association of the German Petroleum Industry MWV, 2006; VCI and chemical companies, 2008; Germany Trade & Invest, 2009

May 2013 The Chemical Industry in Germany page 26

Chemical Parks German chemical parks offer investors unique benefits 

Chemical sites are open for companies to industry investments



60 chemical parks with an excellent infrastructure and more than 2,000 ha of vacant sites for companies to invest



Numerous integration possibilities and, consequently, cost-reducing synergies



New industry segment: “Site operators” offer infrastructure, services and expertise from one source May 2013

Source: VCI and chemical companies, Germany Trade & Invest, 2009

The Chemical Industry in Germany page 27

Chemical Parks

The range of services offered by "site operators" 

Optimum economic conditions on site



Fully developed vacant sites with infrastructure suited to the chemical industry



Extensive range of services



Competent support to help new companies to establish themselves



Professional management of chemical parks May 2013

Source: VCI professional association chemical parks, 2009

The Chemical Industry in Germany page 28

Chemical Parks The chemical park concept offers investors individual solutions for their specific business model Investors develop their business model and outsource all other business processes

Capital, financial management

Management processes

Controlling, HR, resources

Core processes

Research/ development

Support processes

Raw materials

Production

Marketing

Sales

Analytics

Energies

Technical services

Logistics

PR

Planing

Real estate

Infrastructure

Sicherheit

Environmental protection

Customers

In chemical parks investors can focus on their core business May 2013

Source: VCI professional association chemical parks, 2009

The Chemical Industry in Germany page 29

Chemical Parks Investors choose the services that suit their business model from the wide range offered by the site operators

Production

 Vacant sites

 Environment/

 Site security

safety/health

 Emergency management/

 Warehousing  Energies/utilities

fire service  Supply and

 HR services  Logistics

disposal networks  Roads and railway

 Hazardous goods handling

tracks

 Disposal

 Analytics

 Authority management  Maintenance/ workshops  Purchasing  Site restaurants  Engineering  Basic and advanced training

May 2013

Source: VCI professional association chemical parks, 2009

The Chemical Industry in Germany page 30

Chemical Parks The chemical park concept is aimed at investors throughout the entire supply chain Raw material producers Rohstoffproduzenten

Chemicals-related processing industry Chemienahe Prozessindustrie

 Basic products (organic/inorganic)

 Paper industry

 Fine/specialty chemicals  Polymers

 Automotive components supply industry  Oil refining

Processors/refiners Weiterverarbeiter / Veredler

 Aluminium industry

 Plastics

 Metal machining

 Pharmaceutical intermediates

 Glass industry

 Mixed products (e.g. paints, surfactants)

Producers of von end Endprodukten products Produzenten

Produzenten Basis nachwachsender Producers of auf goods based on renewable raw materials/biotechnology Rohstoffe / Biotechnologie

 Plastics

 Biofuels

 Pharmaceuticals

 Bio intermediates

 Paints/coatings

 Biopolymers

 Fibers

May 2013

 Detergents/cleaning agents/cosmetics

The Chemical Industry in Germany

Source: VCI professional association chemical parks, 2009

page 31

Chemical Parks Investing in German chemical parks brings benefits for the companies 

Flexibilization and optimization of the business model



Possibility of focusing on core business



Time and cost benefits through offered individual services



Investment benefits through existing infrastructure



Synergy potentials resulting from optimum structures (e.g. links to supply chain,



connections to research institutes)



Benefits from integrated know-how structures May 2013

Source: VCI professional association chemical parks, 2009

The Chemical Industry in Germany page 32

Chemical Parks The success model “Chemical Parks in Germany”

The concept of chemical parks in Germany has proven its value!

We invite investors from all over the world to take part!

May 2013 The Chemical Industry in Germany page 33

I.

Germany – the Investment Location

II.

The Chemical Industry in Germany

III.

Chemical Parks

IV.

Successful Examples

V.

Contact

May 2013 The Chemical Industry in Germany page 34

Example W. and H. Fernholz GmbH

“ValuePark ® has the ideal framework conditions for highly innovative film production. By using local Dow raw materials, we are able to better respond to market requirements and growing customer demands, improve our security of supply, and enjoy cost advantages thanks to the removal of transportation routes.” Uwe and Frank Fernholz, Partner and Managing director, W.u.J Fernholz GmbH & Co. KG Plastics Processing Project data

Decision drivers

 Investment: € 6 million  Ideal conditions regarding location

 Product: FFS-Foils

 Skilled personnel

 Employees: 11  Start of project: April 2009  Start of production: November 2009

 Commodities at site  Customer focus  Investment incentives

 Annual capacatiy: 10.000 t

Timeline

Location ValuePark® Schkopau - Fernholz

October 2008

1

First contact

December 2008

2

Location decision

April 2009

3

Financial incentives advising

1963

4

Company foundation

May 2013

April 2009

5

Start of construction

December 2009

6

Start of production

The Chemical Industry in Germany page 35

Example S.I.Q. - Kunstharze “We may not have opted for the least expensive site, but for the most developed one, and we’re located in the heart of Europe. Given all the experience we’ve gained so far, we’d make the same decision today if we had to do it all over again.” S.I.Q. Manager Karlheinz Schönnagel

Project Data

Decision Drivers

 Investment: € 5 million

 Located within Europe

 Investment project: multi-purpose plant for producing polycondensates and polyadducts

 Safety aspects

 Jobs in 2007: 32  Annual capacity: 10,000 metric tons

Timeline July 2000 September 2000 November 2000

1

First Contact

2

Feasibility study

3

Location decision

2000/2001 February 2001

4

Detailed engineering

5

Start of construction

October 2001

6

Start of production

 Complete hassle-free deal: all the necessary infrastructure services are available for operating a chemical plant

Location Marl

now

May 2013 The Chemical Industry in Germany page 36

Example Toho Tenax Europe GmbH “Right bang in the center of one of Europe’s most industrialized areas, Oberbruch Industry Park is a natural home for Toho Tenax. Power is available on tap from the on-site NUON plant and the infrastructure is first-class, we need not worry about red tape or logistics. With our fourth production line which will roll into action in August 2009 we consolidate our position as the leading carbon fiber producer in Europe. But we are not at the end of our plans for further expansion here. Carbon fiber worldwide is in short supply, so companies in this industry will need to keep up with demand.” Eckard Scholten, Managing Director Toho Tenax Europe

Project data

 Product / Technology: PAN Carbon Fibers  Investment: ca. € 51 million

Decision Drivers  Worldwide aerospace and industry demand to grow by 15 percent per year over the next 10 years  Expected boom after 2010, when motor industry moves from aluminum to carbon composites for car bodies and parts

 New jobs: 59  Capacity: 1,700 tons

 Highly skilled local workforce

 Start of project: 2008

 Outstanding research bodies

 Start of operation: 2010

 Excellent on-site infrastructure

Timeline

October 2007

1

Start of the project

April 2008

2

Groundbreaking

2008

3

Building up plant

October 2010

4

Start of operation

Location Oberbruch

May 2013 The Chemical Industry in Germany page 37

Example CERAMIC FUEL CELLS “Germany is the leading market for residential fuel cell development in Europe and, with a highly skilled labor force, the region of North Rhine-Westphalia provides one of the most advanced industry clusters for fuel cell technology in Europe. The company will scale up production significantly at this plant, which will allow us to increase revenue, reduce unit costs and feed the growing market demand for fuel cell energy products. We welcome the leadership of the North Rhine-Westphalian government in fostering the fuel cell industry, and acknowledge their strong support for the company’s project. We are also delighted to be working with Nuon as a partner at the Oberbruch site.”, Brendan Dow, Managing Director of Ceramic Fuel Cells Ltd

Project data

Decision Drivers

 Ceramic Fuel Cells GmbH ASX (Australia); AIM(UK)  Product/Technology: Fuel cell technology  Area: 4,000 m2 (stage 1); 40,000 m2 (stage 2)

 Germany -a leading market for residential fuel cell units, world-leading German industries, close to large market

 New jobs: 200; project team: 3

 Highly skilled local workforce

 Start of construction: 2008 (stage 1); start of production:

 Outstanding research bodies  Excellent on-site infrastructure

2009  Annual capacity: 50,000 Stacks/year (stage 1), 400,000

 Financial investment incentives

(stage 2)

Timeline 2005

1

First contact

2006

2

Signing contract

2007

3

Start of the project

2008

4

Start of construction

2009

5

Start of production

stage two

6

New built factory

Location Oberbruch

May 2013 The Chemical Industry in Germany page 38

Example Honshu Chemicals

"The 10,000th ton of BP-TMC is a great success for Hi-Bis and furthermore it is also a necessary step to guarantee Bayer MaterialScience the stability in deliveries, in order to assure the production of APEC® and the provision to the final customer." Managing director Mr Keiji Suzuki, April 2007

Project data

Decision drivers

 Investment: € 38 million  Product: Specialty Bisphenols  Total number of new jobs: 37  Start of construction: April 2003  Start of production: November 2004

 Skilled local workforce  Excellent Infrastructure  High quality of chemicals site  Proximity to product development partners  Financial investment incentives

 Annual capacity of the new facility: 5,000 tons

Timeline 1998

1

First contact

1999 - 2001

2

Feasibility study, site visits

June – August 2001

3

Location decision

April 2001

4

Financial incentives advising

November 2001

5

Formation of a company

April 2003

6

Start of construction

November 2004

7

Start of production

Location Bitterfeld/Greppin

May 2013 The Chemical Industry in Germany page 39

I.

Germany – the Investment Location

II.

The Chemical Industry in Germany

III.

Chemical Parks

IV.

Successful Examples

V.

Contact

May 2013 The Chemical Industry in Germany page 40

Contact

Information about the chemical industry/ chemical Parks: The German Chemical Industry Association (VCI) Mainzer Landstraße 55 60329 Frankfurt am Main Germany Thilo Höchst Managing Director T. + 49 69 2556-1507 F. + 49 69 2556-1607 [email protected]

State: 5/2013 May 2013 The Chemical Industry in Germany page 41

The VCI represents the interests of over 1,600 members regionally, nationally, in Europe and worldwide

Berlin Office Brussels Office

~400 Direct Members

~1.200 Members in 21 Sector Associations

over 1.600 Member Companies

May 2013 The Chemical Industry in Germany page 42

What is a global link for SME‘s? Responsible Care!

Responsible Care is well known in India and Germany

RC is an appropriate management system framework RC has it‘s international KPI‘s and understanding RC contributes to sustainability through the RC Global Charter RC is a tool for management and working people RC is the first step to better risk management RC is the way to talk with administration

RC is a plattform for a better understanding in business

Implement R Improve EHS Share best practices through RC

May 2013 The Chemical Industry in Germany page 43

RC WWW

Internet:  national 

www.responsible-care.de

 international 

http://www.cefic.org/Responsible-Care/



www.responsiblecare.org



www.icca-chem.org

May 2013 The Chemical Industry in Germany page 44