PLASTICS PACKAGING GERMANY
No expectations of positive trends developing in Q4 / High energy costs putting the brakes on German ability to compete
 German plastic packaging companies are feeling the pinch from growing competition and high energy costs (Photo: Greiner) |
The German plastic packaging industry does not expect to see any positive trends suddenly materialise before the end of 2013 according to the latest trend survey findings from the German packaging producers assocation, Industrievereinigung Kunststoffverpackungen (IK, Bad Homburg; www.kunststoffverpackungen.de). Though nearly 50% of respondents described the general economic situation as "good", only 25% of them were also anticipating high turnover for their own businesses. In addtion, the turnover index is also declining against the previous quarter.
The German association places most of the blame for the current unhappy situation on increased competition. It argues that an increasing number of companies from European debt-ridden countries are trying to gain a stronger foothold in the German market. In addition, Germany's extremely high energy prices do not help the situation either, hindering the competitiveness and flexibility of mid-sized entities within the plastic packaging sector. The high costs are taking their toll on investment plans as well. According to the IK, highly innovative industries such as plastic packaging, rely on short investment cycles to maintain their competitiveness.
If this was not enough, the association also says the forecast for export performance has shown no improvement over the previous quarter. The rosey economic data from some EU countries has had little positive impact on export-oriented German packaging producers.
Survey participants also expect the profit situation to remain sluggish, which the IK attributes to the cost explosion within the energy sector. Due to the German Renewable Energy Act (or EEG) allocation, additional financial burdens for plastic packaging businesses are somewhere in the six- and seven-figure region for 2013.
Thus the IK, with more than 300 member companies, is calling for an immediate re-thinking of the EEG allocation. It says both the German federal and state governments are being challenged to find a viable solution. This is not the first time the IK has criticised the national energy policy: In July the IK lashed out at German policymakers stating the regulation was "out of control" with "mad costs for industry", which would soon lead to some companies being forced to move production outside of Germany – see Plasteurope.com of 05.07.2013.
The German association places most of the blame for the current unhappy situation on increased competition. It argues that an increasing number of companies from European debt-ridden countries are trying to gain a stronger foothold in the German market. In addition, Germany's extremely high energy prices do not help the situation either, hindering the competitiveness and flexibility of mid-sized entities within the plastic packaging sector. The high costs are taking their toll on investment plans as well. According to the IK, highly innovative industries such as plastic packaging, rely on short investment cycles to maintain their competitiveness.
If this was not enough, the association also says the forecast for export performance has shown no improvement over the previous quarter. The rosey economic data from some EU countries has had little positive impact on export-oriented German packaging producers.
Survey participants also expect the profit situation to remain sluggish, which the IK attributes to the cost explosion within the energy sector. Due to the German Renewable Energy Act (or EEG) allocation, additional financial burdens for plastic packaging businesses are somewhere in the six- and seven-figure region for 2013.
Thus the IK, with more than 300 member companies, is calling for an immediate re-thinking of the EEG allocation. It says both the German federal and state governments are being challenged to find a viable solution. This is not the first time the IK has criticised the national energy policy: In July the IK lashed out at German policymakers stating the regulation was "out of control" with "mad costs for industry", which would soon lead to some companies being forced to move production outside of Germany – see Plasteurope.com of 05.07.2013.
10.10.2013 Plasteurope.com [226535-0]
Published on 10.10.2013
German version of this article...