Bloomberg pointed to the risk of collapse of the German chemical industry
Germany's chemical industry faces the risk of uncontrolled collapse due to years of problems exacerbated by the energy crisis and growing competition from Asia. This was reported by Bloomberg on May 23.
"Now the recession is entering a new phase, when consolidation [of production facilities in large industrial parks] risks turning into a chaotic collapse that will drag down even those parts of the industry that have a chance of a profitable future. <...> Executives, investors, and union leaders fear that the wave of closures, divestments, and company restructuring that has already begun will weaken the industry, making it too weak to finance its future," the article says.
The financial capacity of Germany's chemical sector has been depleted by a prolonged period of weak demand, rising costs and global overcapacity, the article notes. As a result, German companies lose the opportunity to finance innovation and production modernization, while their competitors in China expand production by opening new factories with lower costs.
As the head of the German chemical trade union, Michael Vasiliadis, warned, the chemical industry is at risk due to the high degree of consolidation of production at large enterprises. Therefore, the closure of individual plants can cause a chain reaction throughout the supply chain, which will lead to unreasonably high production losses, the expert noted.
The Handelsblatt newspaper on May 18 recalled that the German automotive industry faced new difficulties in the supply of microchips due to the sanctions policy of the European Union. According to the publication, the EU is taking sanctions measures against Chinese chip manufacturer Yangzhou Yangjie Electronic Technology. This complicates the situation for companies that have previously started looking for new sources of component supplies.
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