German Firms Spend More in US Than at Home, Says VCI
In another communication expressing its growing frustration with the lack of clarity as to the energy policy of the new German federal government still being negotiated, the chemical industry association Verband der Chemischen Industrie (VCI) has published figures suggesting that German chemical firms are investing increasingly abroad, where energy is cheaper.
The association said foreign fixed investments by German chemical companies rose by around 25% in 2012 to €7.7 billion, while domestic capital spending stagnated at €6.3 billion. For the first time since 2001, it noted, foreign investments by German chemical company were higher than at home.
Much of German chemical producers' capital spending is apparently being shifted to the U.S. Over the past three years, the companies spent €6.5 billion on building new plants there or expanding existing facilities, said VCI. Spending in 2012 rose 54% to around €3.2 billion.
The fact that over 41% (compared with only 28% in 2005) of German chemical investment abroad now is earmarked for the U.S. underlines the renewed attractiveness of the country as a location for business, said VCI. It attributes the increased interest to the start of the shale gas boom in 2009. At present, electricity prices are two and a half times higher than in the U.S., gas prices three times higher, the association believes.
Cost increases for energy in Germany "put our companies under strong pressure," said VCI's general manager Utz Tillmann, calling on the German political sector to make the country's move away from nuclear power and toward renewable resources "affordable."
