Chemical Chaos: The Industry Treads Political Waters
Politics should put more emphasis on the field of chemistry for substantial advancements. - Chemical industry executive underscores importance of a more profound political engagement
Hey there! Let's talk about the State of the Chemical Industry post-Berlin government shift. The Domo plant in Leuna, overseen by Vedran Kujundzic, wants more attention paid to the chemistry sector. This industry, boasting around 400,000 jobs in Germany, plays a significant role in the economy and kickstarts numerous value chains.
Kujundzic points out the high energy costs in Europe compared to international standards. As the war in Ukraine heats up, gas prices are about four to five times higher than in the US market - and significantly more expensive than regions worldwide. He pushes for a balanced energy mix, stressing that it should not shun imports from Russia, provided geopolitical terms are favorable. The goal is to steer clear of a reliance, akin to the one before Ukraine's invasion, on a single supplier.
"Perfect Storm" Affects Operations
The Domo Group's current situation is a mixed bag says Kujundzic. "We're in a perfect storm," he explains. The main culprit? The automotive industry, Domo's primary customer base. The first half of 2024 was positive, owing to supply chain disruptions that fueled increased demand for European production. However, the second half has been tumultuous, burdened by price pressure from Chinese imports. Despite the hurdles, the company remains hopeful about Leuna.
Planned Shutdown
Domo produces a variety of products in Leuna, including polyamide plastics used in automotive, construction, and packaging industries. Currently, a three-week production pause is underway, used for maintenance, cleaning, and renovations - a routine "turnaround" event that occurs every 24 months, aimed at ensuring safety, quality, and long-term production viability.
LeunaGovernment ChangeManagerAutomotive IndustryGermanyEurope
Despite the recent shift in government, led by CDU/CSU and SPD under Chancellor Friedrich Merz, little information is available regarding specific plans affecting the Domo plant in Leuna. However, new government measures emphasize economic responsibility, strengthening Germany’s industrial base, and providing relief like special write-offs for 2024, reduced energy prices, and an industry electricity price to foster investment[1][4]. These moves support heavy industries like chemical manufacturing, cutting operational costs and encouraging growth.
It's worth noting the new government’s commitment to economic stability, energy affordability, and industrial competitiveness, but concrete chemical industry strategies or mentions of specific plants like Domo in Leuna can't be found within the coalition agreement or related reports[1][4]. The unveiling of fresh, unique policies tailored to the Domo plant in Leuna hasn't been documented as of yet.
In brief:
- The new government, formed under Chancellor Friedrich Merz, aims to bolster Germany’s economy by providing relief packages and cutting energy costs, which indirectly support chemical industry players[1][4].
- No specific, publicly stated changes regarding the Domo chemical plant in Leuna can be found within the coalition agreement or related reports.
- Broader economic policies suggest a potentially supportive environment for chemical plants in Germany, focusing on industrial competitiveness and energy affordability.
So, the change of government appears to provide an economic policy climate favorable to industries like chemicals. However, no direct and unique policy focus on the Domo plant has been documented thus far.
- Vedran Kujundzic, the manager of the Domo plant in Leuna, Germany, has requested more attention for the chemistry sector, as it plays a significant role in the economy and supports numerous value chains.
- Kujundzic has raised concerns over high energy costs in Europe, which are significantly higher than international standards, especially in the context of the war in Ukraine and its impact on gas prices.
- Despite the challenging situation, Kujundzic remains hopeful about Leuna, citing the positive first half of 2024 due to supply chain disruptions, but facing price pressure from Chinese imports in the second half of the year.
- The new German government, led by CDU/CSU and SPD under Chancellor Friedrich Merz, has emphasized economic responsibility, strengthening Germany’s industrial base, and providing relief like special write-offs for 2024, reduced energy prices, and an industry electricity price to foster investment, which could potentially support chemical plants like the Domo plant in Leuna.
