The pivotal quarter ahead
What is happening at present in the plastics industry can hardly be surpassed in terms of drama and apparent hopelessness. Since the founding of the Federal Republic of Germany, things have never been as bad – either perceived or actual – for the companies in the industry as they are at present.

It doesn’t take an economics research expert to see how massively German and other national industries are suffering. Nor does it require a crystal ball to know that things cannot go on like this if Germany is not to end up in a mental and economic depression of unimagined proportions – with effects not only on the economy but also on the entire social structure.

At the annual conference of Germany’s association for plastics packaging and films Industrievereinigung Kunststoffverpackungen (IK) in Constance, the growing uncertainty in the industry was tangible. As we know, uncertainty is poison for companies, and panic, fatalism, and resignation are extremely bad advisors.

Yet more and more converters, producers, and recyclers are perplexed and desperate, asking themselves: How long can we carry on? How long will we be able to take the absurd increases in energy prices (up to 500% in individual cases)? When will we have to shut down production plants and lay off staff because the costs of gas and electricity are making our products exorbitantly expensive?

The longer the energy crisis continues and the more it escalates, the more the failure to act in the past is becoming evident. Although the Ukraine war was something nobody could have (or wanted to) reckon with, the fact that Germany has been relying entirely on Putin’s cheap gas for its energy supply over so many years was a big mistake. Yet putting the blame entirely on politicians would be the easy way out and dishonest. After all, industry also knowingly and willingly went along with this concentrated risk (a mistake now possibly being repeated in dealings with China) and made good money from it.

Almost more alarming than the misjudgement of Russia is the fact that the often postulated turnaround in energy policy has not advanced one iota for more than a decade. There is no explanation or excuse for the fact that lobby associations, bureaucrats, and politically disillusioned, enraged citizens have so far blocked and prevented this mega-project, particularly against the background of the present dramatic situation.

Since its reunification, Germany has – at least among the general population – experienced a phase of enormous prosperity at a high level. Yet affluence and luxury have made us lazy, ponderous, and complacent. If somehow or other everything keeps bobbing along, the willingness to make the necessary reforms fades. This approach is now taking its toll.

The war in Europe and the resultant distortions in the economy have the destructive potential to also drive the plastics sector to the edge of collapse (or even beyond). The mood within the industry’s companies is as bad as it has been for a long time, and it’s common knowledge that the real economic situation frequently follows the expectations of its players in a kind of self-fulfilling prophecy.

The political parties may now be trying to conceal their lack of a plan with half-baked ideas such as excess profits tax and a gas levy. Yet this populistic posturing will not change anything as regards the fact that, for the German plastics industry, the coming three months from October to December will be pivotal – either for good or for bad.

Christian Preiser
KI Editor in Chief
22.09.2022 Plasteurope.com [251186-0]
Published on 22.09.2022

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