The German plastics industry, comprising producers, converters and machinery manufacturers, had 394,000 employees and generated sales of over EUR 84 bn in 2008. It is still the clear European leader. A new interest group, the German Plastics Industry Federation (Wirtschaftsvereinigung Kunststoff – WVK; www.wv-kunststoff.org) has recently been established to highlight the importance of this key sector of German industry. The founding members are the German section of PlasticsEurope, the German plastics converters association Gesamtverband Kunststoffverarbeitende Industrie (GKV), the German Plastics and Rubber Machinery Association (KuG) within the German Engineering Federation (VDMA) and the plastics recycling company BKV Plattform für Kunststoff und Verwertung.

At a press conference held in Frankfurt on 18 June 2009 to launch the new organisation, GKV president and founding president of the WVK Dr. Reinhard Proske said that the role of the new organisation would be to represent the entire industry in dealings with politicians and the general public. In future it will therefore represent the sector’s interests within the German industry confederation Bundesverband der Deutschen Industrie (BDI; www.bdi.de).

As well as improving the industry’s public image, the WVK’s goal is to establish joint political positions and represent the common interests of the sector. Plastics is one of Germany’s key industries and accounts for 6% of the country’s industrial output. Focal areas of the WVK’s work will be energy and raw materials, the environment, consumer protection, research, innovation and training. Since over 90% of Germany’s roughly 3,700 plastics companies are small or mid-sized enterprises, providing support for such companies will also be a major area of focus.

Since elections to the German parliament are to be held in September 2009, the WVK has already worked out a position paper with its member associations to outline the industry’s requirements. A key demand is that the government should give a clear political commitment to maintaining Germany’s industrial base. The WVK is therefore appealing to the government to provide a framework that makes investment in Germany more attractive. Alongside deregulation and a reduction in bureaucracy, that includes tax incentives for R&D and full implementation of European regulations without national exclusion clauses.

At the press conference Dr. Proske stressed that the entire German plastics sector is currently going through a “truly stormy period”. The global financial and economic crisis has hit the sector with full force and all segments have reported an unprecedented drop in demand since the fourth quarter of 2008. While converters and machinery manufacturers were able to make a profit overall last year thanks to their good performance in the first part of the year (see Plasteurope.com of 05.03.2009), both sales and output were negative in the production segment (see Plasteurope.com of 08.05.2009). By the first quarter of 2009 entire sector was feeling the full brunt of the downswing.

German plastics producers recorded a 35.5% drop in sales year-on-year in the first three months of 2009. Domestic sales contracted by 36.1%, while exports were down 35.2%. The overall production index (base: 2005) fell 31.4%. Dr. Günter Hilken, chairman of the German section of PlasticsEurope, feels that plastics particularly are badly affected by the present economic problems because they are used in such a wide range of applications. Conversely, the sector should benefit particularly strongly from an upswing. Dr. Hilken expects 2010 to be decisive: “It will show us where we really stand.”

The drop in sales reported by German plastics converters in the first quarter was slightly more moderate 19.8% (see Plasteurope.com of 03.06.2009) but there is no sign of an improvement at present. Foreign sales contracted by 23.9% while domestic demand receded by 17.2%. The production index dropped 19.5%.

The German plastics and rubber machinery sector has been particularly badly hit by the slump in virtually all markets around the world. Jan-Udo Kreyenborg, former chairman of the Plastics and Rubber Machinery Association (see Plasteurope.com of 30.06.2009) reported that sales slumped by 27% in the first quarter. Export sales plunged 29%, while domestic sales dropped 23%. However, he hopes that the broad diversification of this segment will prove an advantage when the economy picks up.

Dr. Proske described the massive drop in sales and output in the plastics industry, which has been growing for decades, as a “watershed”. Nevertheless, he could not see any reason for long-term pessimism: “There are initial signs that the situation has stabilised, albeit at a very low level.” Although a sustained upswing cannot be expected to start this year, Dr. Proske reported that current economic indices point to a gradual improvement in sentiment, suggesting that the downward trend could be coming to an end.