Germany's plastics manufacturers are feeling their oats. After returning to profit in 1994, the sector got off to a good start in 1995., said the producers' association, Verband Kunststofferzeugende Industrie e.V. ( VKE, Karlstr. 21, D-60329 Frankfurt). Demand for polypropylene in Q1 was "higher than anticipated," and other polymers also performed well. For the first half, the association sees few clouds on the horizon. However, as business is expected to slacken during the course of the year, due to the stockpiling effect, volume gains will only be only "moderate," VKE president Dr Albrecht Eckell predicted in Frankfurt. By contrast, he said, the value of production could be considerably higher, due in particular to price increases producers hope to push through before the summer lull..

Dr Eckell advised converters that the industry's price rounds are by no means over, while at the same time reminding customers that they "also have increased prices, as well as making strides in productivity." Rises for some commodities of up to 80% in 1994 should be seen against the background of a declines of as much as 58% between mid 1992 and late 1993, as well as substantially higher feedstock costs, he said. According to VKE figures, selling prices in some cases are still 25% lower than 1991. The producers see price hikes for engineering polymers as even more sorely needed. Price improvement here has been "minimal," despite considerably higher volumes, said Eckell, This is attributed to "enormous pressure" from customers. As a final argument, the VKE president noted that part of the price upturn achieved last year has been eaten up by shifts in foreign exchange parities this year.

The plastics production sector made substantial gains in production and sales, as well as prices, in 1994. VKE figures show capacity utilisation up more than 95%, output 15% higher at 11m t. Volume sales rose 16% to 9.5m t. Production value increased by 13% to DM 30.5bn, turnover by 14% to DM 25.3bn. Polystyrene was the star performer among commodities, with output up 16% to more than 656,000 t, followed by polypropylene, up 12.5% to nearly 707,000 t. HDPE production rose 11% to just under 794,000 t, LDPE 4.7% to almost 973,000 t and PVC 4.5% to more than 1.26m t, despite what Eckell termed "discriminatory campaigns" against it.

Technical plastics profited in particular from the recovery of the automobile and E&E sectors in 1994, as well as an increase in packaging production. Output of PET soared 43% against 1993, polyamide 41%, while output of styrene copolymers (ABS/SAN) rose 36%. Overall consumption of plastics in Germany rose 10% to around 10m t.

The German plastics production sector improved its position as a net exporter in 1994, following a weakening in 1993. Exports rose 26% to 6.4m t, imports by 19% to 5.3m t. The export ratio climbed to 57%. Some 85% of exports were to European countries; imports also were almost exclusively within Europe. German exports to Asia/Pacific rose nearly 17% in 1994 and accounted for nearly 9% of foreign sales. However, Eckell said VKE sees this as a temporary phenomenon. As Asia will soon become self sufficient, he suggested that time may be running out for Europe to get its house in order. To meet the growing challenges from countries.with low cost production, more joint ventures and strategic alliances will be needed, he concluded.

READER SERVICE: Press conference speech by Dr Eckell, with details on business developments in the plastics production sector in 1994 (German): PIE-No. 37699 – Comprehensive statistical material on plastics production in Germany, with foreign trade statistics (German): PIE-No. 37700.