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CHEMonitor: International Market Risks Unsettle the German Chemicals Industry

Moderate satisfaction with the site factor of digitalization

Mannheim, November 22nd 2016 – For the German chemicals industry, insufficient data security, geopolitical crises and a lack of information about market changes represent the largest potential risk. At the same time, site conditions in Germany are rated more positively than ever. The site factor of digitalization only performs moderately well, however. These are the results of the current CHEMonitor trend survey by CAMELOT Management Consultants and the specialist magazine CHEManager.

For the CHEMonitor trend barometer, more than 200 top decision makers in the German chemicals industry are consulted each year. In the current poll, 90% of chemical managers rate Germany “good” or “very good” as a site, 10% more than in January of this year. “Satisfaction with site conditions has reached a new all-time high. After more cautious predictions at the beginning of the year, expectations for profit and sales development stabilized. In parallel to this, large companies in particular are focusing more heavily on cost minimization programs,” Dr. Josef Packowski, Managing Partner at CAMELOT, says, summarizing the results of the CHEMonitor survey on economic development in the chemicals industry.

Site factor of digitalization
In the current survey, the CHEMonitor panel was for the first time asked about its estimation of digitalization as a site factor for the chemicals industry. Of those questioned, 58% rated digitalization in Germany as “good” or “very good”. With this, digitalization is ranked on the lower side of average, ahead of working costs (25%), company taxation (18%) and energy costs (11%). Quality of research and development stayed in first place of all the site factors, being valued positively by 93% of those interviewed.

Risks at a glance
The topic of risk management was the focal point of the current CHEMonitor survey, which was concluded a week before the accident at BASF on October 17. Asked about risks with a high significance for their own company, about half of the managers pointed towards IT risks (48%), followed by strategical (46%) and operational risks (43%) as well as compliance risks (39%).

The chemicals managers surveyed saw the main cause of potential risks as insufficient data security (44%), geopolitical crises (39%), insufficient information or indicators about changing markets (36%) and misjudgments by employees (30%). “Geopolitical developments and a lack of information about market changes are among the most substantial risk drivers in the chemicals industry,” Dr. Sven Mandewirth, partner at CAMELOT, confirms. “Comprehensive and strategic risk management enables companies to recognize risks and opportunities in the market early and as such to achieve a significant competitive benefit.”

Market risks bring the highest potential for damage
Within the scope of the CHEMonitor survey, participants were asked what concrete risks their own companies have faced in the past three years that have brought about significant negative effects. The high relevance of market risks was confirmed: More than half of the managers surveyed come from companies that had suffered sales losses because of sluggish markets (62%) and losses due to currency fluctuations (51%). Significant damages from data losses and hacker attacks, in contrast, were incurred by only 15% of those surveyed. The number of events with significant negative impacts from personal and environmental damages as a result of accidents is comparatively low at 9%.


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