Germany is becoming less attractive as a
hub for chemical activity, with many of the nation's companies
targeting the US for new investment, according to a new report
released Tuesday from German chemical industry trade group VCI.
German companies invested 3.2bn in
new chemical plants or expansions in the US a year ago, up
54% from the prior year. The US now accounts for 41% of the
German industrys foreign investments, up from 28% in
Overall, the year 2012 marked the first
time since 2001 that foreign investments from German companies
exceeded domestic investments.
Our chemical companies are facing
significant pressure in Germany, because of the increases in
energy costs, said VCI general manager Utz Tillmann.
Abroad, and particularly in the US, the firms obviously
find better conditions for their production, helping them to
preserve their competitiveness.
VCI said that Germanys electricity
costs are 2.5 as high as the US, while natural gas prices are
about three times as high.
If Germany wants to increase its domestic
investment, the country needs to ensure that its plan to exit
nuclear power and build up its renewables sector remains
affordable for producers, Tillman said.
Otherwise, the development could turn into
a trend, he warned.
On the whole, foreign investments from
Germanys chemical industry rose 25% to 7.7 billion
in 2012, while domestic investment stagnated at 6.3
The full VCI report can be read here.