China Tongcheng Tianbai Plastic Co.,Ltd.

The German plastics processing sector rebounded in 2010 with 14 percent sales growth, reaching to 51.3 billion euros ($74.3 billion).

The strong 2010 followed two weak years — a drop of 14 percent in 2009 and growth of only 2 percent in 2008.

German’s processing sector came close to the record level of sales achieved in 2008 — 52.3 billion euros. Production volume rose in 2010 by 7 percent, to 12.2 million metric tons. It, too, was still below the record level of 12.8 million metric tons in 2008.

GKV, the German trade association for plastics processors (Gesamtverband Kunststoffverabeitende Industrie e.V) revealed the 2010 results at a March 9 news briefing.

Exports increased by 15.5 percent to 18.3 billion euros ($26.5 billion), reversing the 16 percent drop in 2009. Sales to the domestic market grew slightly less strongly, up 13 percent to 33 billion euros ($47.8 billion), compared with a 12.5 percent decline in 2009.

GKV President Bernd-Otto Kruse commented: “The economy had clearly already started to grow again in Asia in the second half of 2009, but the rapid growth in 2010 was hardly to be foreseen. As much as the free-fall had been unprecedented, so too was the comeback.”

Kruse put the results in the context of the 3.6 percent growth in German GDP in 2010, the fastest economic growth since the reunification of the country more than 20 years ago. He pointed out that the plastics processing industry has again returned to its traditional trend of outpacing growth in the overall economy. This had not been the case in 2009, when German GNP shrank by 5 percent, while the German plastic processing industry turnover fell more, by 14 percent.

Fastest growth in 2010 came at producers of technical parts, primarily for the automotive, electrical and electronic industries, climbing by 22.7 percent to 11.9 billion euros ($17.2 billion), compared with a 23 percent decline in 2009. But volumes grew less strongly in 2010 for the sector, by 10 percent to 2.2 million metric tons. The sector’s fortunes are closely tied to those of the automotive industry, which accounts for two thirds of technical parts sales.

Packaging sales increased by 14 percent to 12.2 billion euros ($17.7 billion), reversing a 14.4 percent decline in 2009. Volume grew by 10 percent to the same 4.1 million metric tons level as in 2008, with packaging film accounting for around 1.7 million metric tons.

The building industry had moderate 5 percent growth in 2010 to 10.8 billion euros ($15.6 billion), but had suffered less than the other sectors in 2009 with a lower 7.3 percent decline in that year. Kruse expressed concern however about the industry suffering now in some countries such as Spain and Portugal following their earlier overheated property booms.

Kruse expressed concern about cost pressures and the need to pass these on more frequently than in the past. Although he praised the German government for its bureaucratic handling of short-time working needs during the crisis, he was critical of the government’s energy policy.

The EEG renewable energy law that applies a surcharge on all electricity bills to raise funds for development of energy from renewable sources puts German producers at a severe disadvantage with other countries and is considered to be a threat Germany as a production location in the medium term. This is most apparent with German energy costs double those of France, Kruse pointed out.

Also on the subject of sustainability, Kruse was unconcerned about actions in other countries to ban plastic bags or limit them to biodegradable versions. He says this is due to the introduction of Dual System Deutschland (DSD) around 20 years ago to manage collection and recycling of post-consumer waste.

“There are no amounts of plastic bags flying around in Germany in quantities worth mentioning. The question of a ban does not even arise, as there is no problem,” he said.

On the other hand, Kruse stressed that GKV is involved through the EuPC umbrella association in support of projects aimed at cleaning the seas and avoiding their contamination with plastics waste.

Developments in Germany with lightweight automotive construction with carbon fiber composites were praised by Kruse as a significant contribution to sustainability.

Looking ahead by referring to the annual GKV survey of its members, Kruse pointed out to average 83.4 percent capacity utilization and order levels averaging 9.3 weeks of production, compared with 6.3 weeks at the beginning of 2010.

While the survey had shown 87 percent of the companies as having been able to increase sales in 2010, 72 percent continue now by expecting higher sales in 2011. These positive signs are also expressed by 28 percent of the companies stating that they will be investing in expanding capacity in 2011.

Kruse looked ahead to likely 2011 results by saying that the German plastics processing industry should be able to regain the level of sales achieved in the record year of 2008, as this would require growth in the year of just 2 percent. He was reserved about this however, not being prepared to give a firm forecast and stating instead “I would like to talk one year from now of more growth in 2011, but I cannot be sure.”