German chemicals manufacturer Allnex is closing its 90-year-old site in Hamburg as the sector faces a squeeze from higher energy pricesBERLIN - Thomas Kadowsky imagined that he would keep working at the German industrial coatings plant where he had served as team leader for more than 30 years until he retired.
The closure is yet another example of the crisis gripping this vital sector of the German economy, which slipped into a recession at the start of the year and, according to data released on Friday, stagnated in the second quarter."The house is on fire", said Markus Steilemann, president of the VCI chemicals industry lobbying group which represents 1,900 companies in Germany.
In February, the giant BASF announced that it was slashing 3,300 jobs, with the closure of several units at its historic site in the western city of Ludwigshafen. On Friday, the company reported a 76-percent fall in second-quarter profits year-on-year. Although they have fallen since their peak in August 2022, energy prices are still five times higher than in the United States and between two and three times higher than in China, according to the VCI.
Despite local tensions, however, unions and companies are in agreement in calling for an energy price cap to help save the sector. Hence some experts are calling for these industries, which will never be competitive on their own in Germany, to be shed and to concentrate on less energy-intensive sectors of the future.
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