The German chemical industry is facing a significant collapse, triggered by the withdrawal of the US company Dow, which will close several energy-intensive production facilities in Germany by the end of 2027. Affected are the sites in Böhlen (Saxony) and Schkopau (Saxony-Anhalt), where around 550 jobs will be lost. These plants are central supply hubs for important basic materials like ethylene and propylene, the absence of which could trigger a chain reaction among numerous chemical companies.
Reasons and Impacts
The reasons for this dramatic step lie mainly in the exploding energy prices, overwhelming bureaucracy, and weak demand from key industries. The facilities that are to be closed belong to the particularly energy-intensive sectors of the chemical value chain – a factor that significantly undermines the competitiveness of German sites.
Warning from the Ruhr Area
At the same time, the Ruhr area warns of an even larger chemical collapse: there are about 15,000 jobs at risk. The capacity utilization of many plants is below 75 percent, and many companies are operating in the red. Particularly affected is the chemical park Marl, a significant site with many suppliers in the vicinity. Mayors and district administrators are sounding the alarm over an impending “chain reaction,” which could not only destroy direct jobs but also drag down many medium-sized suppliers.
Risks for Investors
For investors, this development poses significant danger: potential losses of up to 30% or more on investments in the German chemical sector loom due to plant closures, declining production, and worsening margins as a result of high cost structures and dwindling demand.
These developments mark a profound turning point for the German industrial chemistry sector with far-reaching consequences for employment and capital markets in the sector.
In summary:
| Problem Area | Details |
|---|---|
| Dow Plant Closures | Closure of important plants in Böhlen & Schkopau by the end of 2027; approx. 550 jobs lost |
| Causes | High energy prices, bureaucratic burden, weak demand |
| Ruhr Area Region | About 15,000 jobs at risk; low utilization (<75%), companies in the red |
| Consequences | Structural breakdown in the central German chemical triangle; rising logistics costs; loss of basic supply materials |
| Impact on Investors | Risk of significant price losses (~30%) due to production decline & plant closures |