Chemicals Firm Sasol-Huntsman Expanding German Production Site

11/27/2009

Berlin - Construction is underway for the expansion of the Sasol-Huntsman site in Moers, North-Rhine Westphalia. The joint venture between chemical producers Sasol and Huntsman is investing EUR 82 million to boost its production of maleic anhydride from 60,000 tons per year to 105,000 beginning in 2011. The expansion gives a boost to Germany’s chemical industry and affirms the country’s attractiveness as an investment location despite the economic crisis.

Sasol-Huntsman is one of the leading suppliers of maleic anhydride in Europe. The joint venture is between Sasol, the South African mining and chemicals giant, and Huntsman, the US-based manufacturer of differentiated chemicals for a wide range of industries. In Germany, Sasol-Huntsman focuses on maleic anhydride, which is used primarily in the production of unsaturated polyester resins for applications such as recreational boats, bathroom fixtures, automobiles, tanks, and pipes.

The Sasol-Huntsman investment is a testament to Germany’s attractiveness as a location for investors. In fact, over the past 15 years, investment in Germany’s chemicals sector has more than tripled to EUR 32 billion. At the same time, Germany’s key advantage has come through innovation. Chemical companies spend over EUR 9 billion annually on R&D, while innovative products make up more than 50 percent of industry output.

Germany’s chemicals industry currently leads Europe in every key index – revenues, exports, investments, and R&D expenditures. Total turnover for the industry amounted to EUR 173.6 billion in 2007, while exports came in at EUR 129.7 billion, confirming its position as the industry’s global export leader for five consecutive years.

Despite the ongoing downturn, Germany’s economy continues to show resilience, evidenced by the relative ease of financing the Sasol-Huntsman expansion project. Although GDP growth and exports have taken a hit, Germany has not had a major credit crisis like other countries. At the same time, manufacturing orders and exports are picking up, signaling that the worst has likely passed.

Credit goes in part to Germany’s economic stimulus packages. Germany has set up a Special Financial Market Stabilization Fund (Sonderfonds Finanzmarktstabilisierung, SoFFin) to facilitate lending. The fund can grant public guarantees up to EUR 400 billion to banks and provide additional financing to the tune of EUR 70 billion for recapitalization and the assumption of risk positions.