The chemical sector in the Asia-Pacific region was again the
biggest driver of global growth in the past fiscal year. The
ACC estimates that production grew by 3.1 % in this region,
after standing still in the previous year (0.1 %). The high
momentum is mainly due to the development of chemical
manufacture in China, which is expected to grow by 4.9 %
in 2019, while growth in Korea and Japan was significantly
lower than in the previous year.
In the first few months of 2019, the price of a barrel of
Brent crude initially rose continuously from just under 55
U.S. dollars to 75 U.S. dollars. From June onwards, the price
initially weakened noticeably and, due to fears of a further
intensification of trade conflicts and the sluggish industrial
economy, fell back to the level of the beginning of the year.
Oil prices then rose sharply again in the course of December,
closing the year at 67 U.S. dollars. One of the reasons for
the increase was the announced breakthrough in the negotiations
to defuse the trade dispute between the USA and
China, which had previously repeatedly depressed oil prices.
On an annual average, the price level in 2019 was thus
below that of the previous year.
Important Events for Business Development
In 2019, non-operating effects influenced ALTANA’s earnings
and financial position as well as its assets.
In July 2019, ALTANA acquired the testing instruments
and other laboratory equipment business of the American
Paul N. Gardner Company, Inc. in an asset deal. The activities
were integrated into the BYK division and had a slightly
positive impact on the sales development. By contrast, the
activities acquired at the end of 2019 in the wire enamel
business of the Hubergroup India Private Ltd. did not yet make
a sales or earnings contribution to the ELANTAS division in
the past fiscal year.
The development of exchange rates between the euro,
the Group currency, and other currencies important for
ALTANA had a positive influence on sales development in
54 Business Development
Growth in Asia also slowed down in 2019, but was still at a
high level compared to the other regions. With an expansion
of 6.1 %, China did not reach the growth rate of 6.6 %
of the previous year. The growth rate in India fell more significantly,
from 6.8 % in the previous year to 4.8 % in 2019.
The largest economies of Southeast Asia (ASEAN-5), which
grew by 4.7 %, were also unable to match the growth of
the previous year (5.2 %). In Japan, on the other hand,
the increase in economic output accelerated from 0.3 %
to 1.0 %.
Industry-Specific Framework Conditions
According to estimates by the American Chemistry Council
(ACC), global chemical manufacture increased by 1.2 %
in the past fiscal year, achieving slightly higher growth than
in 2018 (1.0 %). As a result, the growth momentum in
chemical production should increase, contrary to the trend in
global economic output.
However, the regional changes in chemical production
do not reflect the regional development of general eco-
nomic performance in all countries. According to the German
Chemical Industry Association (VCI), Europe’s largest
chemical producer, Germany, again recorded a significant decline
in production volume (excluding the pharmaceutical
industry) of 2.5 % in 2019. On the other hand, the ACC estimates
that other European countries that are important
for the chemical industry recorded positive developments
in chemical production, including the United Kingdom
(+ 1.1 %), France (+ 0.9 %), and Italy (+ 0.6 %). In the entire
European region, chemical production was down 0.4 %
in a year-to-year comparison.
In the U.S., the increase in chemical production fell
significantly to 0.6 % (previous year: 3.8 %), particularly due
to the trade disputes between China and the USA. In
Latin America, chemical production growth also decreased
compared with the previous year, albeit at a significantly
lower level.