A Chemical CEO's Take: Emphasizing Politics for Chemical Industry Growth
Domestic-Chef advocate: Increase the political prioritization in chemistry sector - Domo's CEO emphasizes the significance of a stronger political emphasis on chemical issues.
Hey there! Let's dive into the world of chemicals, shall we? Vedran Kujundzic, the sales director of the Belgian chemical company Domo, has some strong words for the new federal government in Berlin. He's hoping for a greater focus on the chemical industry, which plays a major role in Germany's economy with around 400,000 jobs at stake.
Kujundzic is particularly concerned about those high-ass energy costs across the pond compared to international averages. The war in Ukraine has inflated gas prices by a grim four to five times more than the US market. Yikes! He suggests a balanced energy approach, incorporating a "healthy mix" of sources including potential imports from Russia, depending on the geopolitical climate. Let's avoid the same one-sided dependence we had previously, shall we?
Domo's currently navigating a stormy economic scenario. Kujundzic calls it the "perfect storm," and we can't say we disagree. The main issue? The auto industry, Domo's primary customer. The first half of 2024 was a positive anomaly thanks to supply bottlenecks and a stronger European demand. But oh boy, the second half was a different ball game – Chinese imports brought serious price pressure, crushing Domo's margins. Through it all, the company remains dedicated to its Leuna location.
Currently, Domo is undergoing a three-week production halt – a "turnaround" as they call it. It happens every 24 months and is aimed at ensuring the safety, quality, and longevity of their production process.
Now, let's switch gears and talk politics for a moment. The new conservative-led federal government in Berlin is all about making Germany a leading force in the chemical sector. They're planning a Chemicals Agenda 2045 and are keen on establishing a risk-based regulatory framework, balancing regulations with industrial growth. They're not about blindly banning entire chemical groups, like PFAS – instead, they encourage R&D of alternatives to tackle environmental concerns. That's a pragmatic approach, if you ask us!
Given the chemical industry's energy-intensive nature, the new government is set on addressing the cost-related concerns. They want to reduce power taxes and fees to create more affordable energy, which is crucial for maintaining industrial competitiveness. German household electricity prices are already some of the highest in Europe – the proposed reduction could bring significant relief for energy-intensive industries like chemicals.
Lastly, the government acknowledges the challenges posed by Germany's power grid transformation, which sometimes results in regional mismatches in renewable energy supply and demand, causing price spikes in industrial areas like the one where Domo operates. The government aims to improve grid compatibility and infrastructure to ensure that renewables support stable and cost-effective energy for industry players like Domo.
So there you have it! The changing political landscape in Berlin could bring some major shifts for the chemical industry, and Domo in Leuna is right in the thick of it. Stay tuned to see how it unfolds!
- Leuna
- Federal Government
- Focus
- Berlin
- CEO
- Chemical Plant
- Change of Government
- Ukraine
- Germany
- Europe
- Auto Industry
- China
- Regulatory Framework
- PFAS
- Power Grid
- Renewables
- Energy Transition
- The new federal government in Berlin is set on focusing on the chemical industry, which is a vital sector for Germany's economy, employing around 400,000 people.
- Vedran Kujundzic, the sales director of Domo, a Belgian chemical company, has urged the new government to address high energy costs compared to international averages, especially given the inflated gas prices due to the war in Ukraine.
- Currently operating in Leuna, Domo is facing a challenging economic scenario, with the auto industry being its primary customer, and is undergoing a three-week production halt.
- The new government in Berlin plans to establish a risk-based regulatory framework for the chemical sector, aiming to reduce regulations that could hinder industrial growth, such as a blanket ban on chemical groups like PFAS, and instead encourage research and development of alternatives.
- In a bid to maintain industrial competitiveness, the new government aims to reduce power taxes and fees to offer more affordable energy, alleviate high household electricity prices, and improve grid compatibility and infrastructure to ensure stable and cost-effective energy for industries like Domo.
