A proactive role is being played by the state-owned oil company Adnoc from Abu Dhabi, which has acquired the German plastics group Covestro. Rainer Seele, head of the chemical business at Adnoc's investment arm XRG, defended such entries, noting that no company enters a cooperation unless it sees its own advantages. XRG primarily brings capital strength, which many chemical companies lack in the current downturn. This capital can fund growth, internationalization, and innovation. Regarding further acquisitions in Europe, Seele tempered expectations: 'We are thinking about portfolio diversification.' XRG is not purely focused on Europe, even though it already holds a strong position here.
Despite a short-term uptick in business for many European chemical firms, both managers warned against excessive optimism. The first quarter turned out better than expected, primarily due to the war in the Middle East, Kullmann explained. Due to disrupted supply chains and shortfalls from Asia, many customers are currently forced to increase purchases in Europe and the USA. 'We will see a strong second quarter, driven essentially by stockpiling and the necessity to produce.' However, this effect is not permanent, as Asian competitors will soon return aggressively to the market. 'A sustained recovery is not in sight.' Seele also spoke of a brief breathing space. 'I do not believe the second half of the year will be like the start of the year,' he said. 'It will become more difficult.'
In light of geopolitical shifts, companies must reposition themselves strategically, Kullmann said. Rules-based global trade is a thing of the past. As markets are increasingly closed off by protectionism, firms must adapt their geostrategy and establish a direct presence in respective regions to bypass trade barriers. His group is therefore aiming for an even distribution of business: in the future, approximately one-third each should be accounted for by Europe, Asia, and North and South America. Only those who position themselves successfully in these new 'protection zones' can benefit from the regionalization of the global economy.
The Evonik CEO called for drastic steps from policymakers to free the economy from the grip of bureaucracy. 'We advise this federal government to completely and fully suspend all regulation for the coming years,' Kullmann said. He accused the European Union of focusing on new regulations instead of promoting economic growth. Seele also urged a political rethink, stating that current subsidy policies are the wrong approach. Hesitant tax cuts are equally insufficient; instead, reforms modeled after the 'Agenda 2010' are needed.
(Report by Patricia Weiss, edited by Myria Mildenberger. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
