Decreasing satisfaction with Germany as an economic site
The currently subdued mood in the global economy seems to have an effect on German Chemicals Managers: The current CHEMonitor Trend Survey by CAMELOT Management Consultants and CHEManager reveals decreasing satisfaction with site conditions in Germany. With reference to business and employment development however, the forecast from sector experts remains stable. The Chemicals Managers see a need for action in feedstock procurement: The priorities for this year include an improvement in market knowledge and a reduction of risks.
More than 200 decision-makers from the German chemical industry are questioned twice per year for the trend barometer conducted by CHEManager in cooperation with the strategy and organization consultancy CAMELOT Management Consultants. During the current survey, 80% of the interviewed top managers graded Germany as an industry site as “good” or “excellent”. With a clear -8% in comparison to the last survey in October 2015, site satisfaction has decreased for the first time in three years. Despite the negative development in site conditions, the business forecast expressed by sector experts remains on a par with the previous survey: With 84% or 74% of those questioned, the same number of Chemicals Managers as in October expect an increased turnover or result for their company in the next twelve months.
“The current further decline in the oil price improves the competitive situation of the German chemicals industry to a level comparable with that in the USA before the start of the fracking wave. Even if this may be pleasing in the short term, Chemicals Managers should not develop a false sense of security, because long-term competitive advantages can only be achieved through structural changes,” says Dr. Josef Packowski, Managing Partner at CAMELOT Management Consultants, about the results of the 26th CHEMonitor survey.
Feedstock Procurement: Reliability is more important than price
When asked about the influencing factors in feedstock procurement with an effect on corporate success in previous years, half of the managers specified “legal restrictions and regulations” (53%), “oil price” (52%) or “feedstock availability” (50%). “Geopolitical developments” also played a role in large companies procuring their feedstock from across the globe.
Irrespective of corporate size, the interviewed Chemicals Managers specified reliability (98% of total answers) as being more important than price (83%) in the selection of suitable suppliers. Decision-makers in large companies also regard supplier compliance to be just as important as the feedstock price.
Chemicals Managers are confronted with the identification of risks in procurement more than ever before. “Intelligent, digital solutions to support market analyses and risk monitoring will be a mandatory item on chemicals companies’ agenda in the future”, says Dr. Sven Mandewirth, Partner at CAMELOT. This is also confirmed by the results of the current CHEMonitor survey: more than 60% of the managers want to, during the course of this year, implement measures for more market knowledge on feedstock and their suppliers, as well as a defence against risks in feedstock procurement.
Survey participants are more relaxed when it comes to price risks in feedstock procurement. Nine out of ten interviewed managers assume moderately increasing or stable feedstock prices within the next twelve months. 7% of the decision-makers even expect a reduction in specialty chemicals, the most important feedstock in the German chemical sector.
+49 89 74 11 85-426