The German chemical industry is currently facing a profound crisis, referred to as Chemical Collapse or even “Chemical Apocalypse.” The main trigger is the withdrawal of the US company Dow Chemical from Central Germany, particularly due to the planned closure of its facilities in Böhlen and Schkopau. This development could destroy up to 55,000 jobs in the region and trigger a domino effect throughout the entire sector.
Factors Contributing to the Crisis
- High Energy Prices: The exploding electricity and grid fees are heavily burdening production costs.
- Bureaucracy and Regulations: Overbearing bureaucracy and strict environmental regulations complicate the operations of chemical companies.
- Weak Demand: Key buyer sectors such as the automotive and construction industries show weak demand, further dampening production.
- Political Failure: Despite talks between Dow CEO Jim Fitterling and Chancellor Friedrich Merz, no effective relief measures have been achieved. The promised relief on electricity taxes has not yet been implemented.
Industry-wide Challenges
Other large chemical companies like BASF are also planning plant closures due to similar difficulties, indicating a general weakness in the industry. Experts warn of massive job losses as well as significant declines in stock prices of chemical companies – losses of 30% or more are possible.
The withdrawal of Dow Chemical symbolizes an industrial decline, especially in East Germany (Saxony, Saxony-Anhalt), where industrial structures were painstakingly built after reunification. High energy costs, political uncertainty, and global competitive pressure lead to the migration of important industrial companies.
For investors, this means a phase of great uncertainty. They should be vigilant due to looming billion-dollar losses from plant closures, job reductions, and falling stock prices in the German chemical industry.