The German chemical and chemical processing industry is a global heavyweight. Measured in every key index - revenues, exports, investments, and R&D expenditures - Germany is Europe's frontrunner; accounting for approximately a quarter of total EU 27 capacity. Chemical companies that produce in Germany are strong competitors in international markets and Chemical parks contribute to this success.

Beyond chemicals, this is also true for related industries, such as plastics, paper, glass, and ceramics. In these sectors Germany is also number one in all key measures. One of the major facilitators for their success is the shift to chemical parks and sites where companies benefit from increased efficiency through the "plug and play" structure. Therefore, these parks are not only proving to be the future of Germany's chemical industry; they are also proving to be a major draw for the related paper, plastics, glass and ceramics process industries as well as the industrial biotechnology sector. Furthermore, in recent years chemical parks and sites have demonstrated their suitability for investments in the fields of biofuels, biopolymers, and photovoltaics. For example, solar company Crystalox Solar Silicon, a subsidiary of the British company Crystalox Solar, recently opened its new production facility in the ChemiePark Bitterfeld-Wolfen.

As an investment location, Germany distinguishes itself internationally from its competitors. This remains true even in the current economic crisis. In a recent survey conducted by the American Chamber of Commerce (AmCham), American firms indicated that Germany was the number one investment location in Europe for them. Reasons cited included the high product and process quality in Germany. These are factors that both companies and customers greatly value, especially in an economic downturn.

Germany's Business Location AdvantageThe German chemical and chemical processing industry is a global heavyweight. Measured in every key index - revenues, exports, investments, and R&D expenditures - Germany is Europe's frontrunner; accounting for approximately a quarter of total EU 27 capacity. Chemical companies that produce in Germany are strong competitors in international markets and Chemical parks contribute to this success.

Beyond chemicals, this is also true for related industries, such as plastics, paper, glass, and ceramics. In these sectors Germany is also number one in all key measures. One of the major facilitators for their success is the shift to chemical parks and sites where companies benefit from increased efficiency through the "plug and play" structure. Therefore, these parks are not only proving to be the future of Germany's chemical industry; they are also proving to be a major draw for the related paper, plastics, glass and ceramics process industries as well as the industrial biotechnology sector. Furthermore, in recent years chemical parks and sites have demonstrated their suitability for investments in the fields of biofuels, biopolymers, and photovoltaics. For example, solar company Crystalox Solar Silicon, a subsidiary of the British company Crystalox Solar, recently opened its new production facility in the ChemiePark Bitterfeld-Wolfen.

As an investment location, Germany distinguishes itself internationally from its competitors. This remains true even in the current economic crisis. In a recent survey conducted by the American Chamber of Commerce (AmCham), American firms indicated that Germany was the number one investment location in Europe for them. Reasons cited included the high product and process quality in Germany. These are factors that both companies and customers greatly value, especially in an economic downturn.

Germany's Business Location Advantages

The chemical industry in Germany offers investors a globally unique and attractive business model with its chemical parks and sites. Foreign investors are able to profit from the plethora of possibilities that the chemical industry and the related processing industries currently offer in terms of successful business models. Evidence can be seen in the foreign direct investment (FDI) growth within Germany. Foreign companies have continuously expanded their facilities in Germany in recent years. FDI volume in the chemical industry has more than tripled the past 15 years - to a volume exceeding €32 billion.

As a result of the shift towards highly innovative chemical parks, today's chemicals sites offer everything necessary for investors to have direct access to their core business activities: space, safety, infrastructure, R&D networks and logistics, supplies, and waste management. With these factors, investors and businesses have a full-service package available on-site. This creates especially attractive conditions for small and medium-sized enterprises (SMEs). The investor brings its production to the business location and integrates its new setup into the existing fully-equipped infrastructure. The advantages for investors are manifold: investment expenses are kept low due to the existing chemical park infrastructure, business opportunities are increased across the entire value-added chain, investment and operating costs are reduced, and product launch times are decreased.

Evolution of Germany's Chemical Industry

The current opportunities for investors are the result of dramatic shifts in the European political and industrial landscape. These changes were triggered in part by the reunification of Germany, the subsequent privatization of East German chemical holding companies and their modernization. The global structural changes in the chemical industry since the end of the 1990s - as well as globalization, with its massive industrial investments in China and the Middle East - have also moved these developments forward. Finally, many chemical and pharmaceutical companies have developed strategies to concentrate on their core competencies and to cede less central functions. This structural dynamic has had a substantial influence on the German chemical industry. For investors looking to expand production units, a broad spectrum of diverse services has emerged thanks to this process.

In this manner, value is added for all companies present at the business site. The successful cooperation between companies on location, under the umbrella of the chemical park operators in Germany, acts as a business model for industrial development worldwide. This model is not only viable in fair weather conditions, but also proves resistant in difficult economic phases, as demonstrated by the uninterrupted high level of investment interest in these sites.

Innovation Leaders - Germany's Chemical Parks and Sites
There are a number of successful chemical parks and sites that demonstrate the multitude of possibilities available to both SMEs and large companies. These examples show that established players and smaller start-ups alike can profit from economies of scale and cost sharing, while driving innovation at these sites. The following represents a limited selection of the numerous parks and sites that make Germany an attractive business location for the chemical industry.

One example is the CFK Valley in Stade. The 4,000 square meter facility allows national and international players to jointly develop processes and prototypes, allowing them to consolidate project research and strategy and develop R&D roadmaps together. Industries represented include aerospace, automotive, track vehicle construction, shipbuilding, and energy. Currently, players such as EADS, Airbus, Dow Germany, Fraunhofer-Gesellschaft, and the German Center for Aeronautics (DLR) are active at this site. The facility also includes a Master of Science program in engineering to train future employees.

The plastics industry also benefits from the Fraunhofer Pilot Plant (PAZ) in the Dow Valuepark in Schkopau. This plant facilitates polymer synthesis on a larger scale through process optimization and partnerships. The facility features six polymerization lines for solution, emulsion, suspension, bulk and poly-condensation reactions; a hydrogenation reactor; and a processing center with industrial scale injection molding units and compounders. The plant is jointly operated by the Fraunhofer Institutes for Applied Polymer Research (IAP) and Mechanics of Materials (IWM), providing access to cutting edge technology.

The CLIB2021 industrial biotechnology cluster was founded to promote the utilization of renewable resources in the production of novel materials and active ingredients. It boasts around 60 cluster members, including roughly 30 SMEs, 11 internationally renowned universities and R&D institutes, and well-known companies such as Bayer Technology Services, Cognis, Evonik, Henkel, and Lanxess. The cluster benefits from academic excellence across the entire production chain, which serves to foster innovation.
A further novel idea resulting from the chemical parks and sites business model is the Hycologne site. The chemical and petrochemical industry around Cologne produces large volumes of hydrogen as a by-product of its production processes. HyCologne is a public-private-partnership with over 20 participating companies that was founded to establish hydrogen as an economically interesting and environmentally beneficial fuel. Members include Ford, Daimler, and Toyota, who have all located their production and R&D divisions near Cologne to produce hydrogen-based fuel cells for transportation by 2016.

The chemical industry in Germany offers investors a globally unique and attractive business model with its chemical parks and sites. Foreign investors are able to profit from the plethora of possibilities that the chemical industry and the related processing industries currently offer in terms of successful business models. Evidence can be seen in the foreign direct investment (FDI) growth within Germany. Foreign companies have continuously expanded their facilities in Germany in recent years. FDI volume in the chemical industry has more than tripled the past 15 years - to a volume exceeding €32 billion.

As a result of the shift towards highly innovative chemical parks, today's chemicals sites offer everything necessary for investors to have direct access to their core business activities: space, safety, infrastructure, R&D networks and logistics, supplies, and waste management. With these factors, investors and businesses have a full-service package available on-site. This creates especially attractive conditions for small and medium-sized enterprises (SMEs). The investor brings its production to the business location and integrates its new setup into the existing fully-equipped infrastructure. The advantages for investors are manifold: investment expenses are kept low due to the existing chemical park infrastructure, business opportunities are increased across the entire value-added chain, investment and operating costs are reduced, and product launch times are decreased.

Evolution of Germany's Chemical Industry

The current opportunities for investors are the result of dramatic shifts in the European political and industrial landscape. These changes were triggered in part by the reunification of Germany, the subsequent privatization of East German chemical holding companies and their modernization. The global structural changes in the chemical industry since the end of the 1990s - as well as globalization, with its massive industrial investments in China and the Middle East - have also moved these developments forward. Finally, many chemical and pharmaceutical companies have developed strategies to concentrate on their core competencies and to cede less central functions. This structural dynamic has had a substantial influence on the German chemical industry. For investors looking to expand production units, a broad spectrum of diverse services has emerged thanks to this process.

In this manner, value is added for all companies present at the business site. The successful cooperation between companies on location, under the umbrella of the chemical park operators in Germany, acts as a business model for industrial development worldwide. This model is not only viable in fair weather conditions, but also proves resistant in difficult economic phases, as demonstrated by the uninterrupted high level of investment interest in these sites.