By Ozan Ergenay and Marta Frackowiak
(Reuters) -German chemicals distributor Brenntag said on Wednesday that it supports Germany’s proposed infrastructure fund, but urged more action to address increasing competition from China.
The German chemical sector, the country’s third-largest industry, has struggled with subdued demand, high energy costs, supply chain issues and an economic slowdown. U.S. President Donald Trump’s tariff roll-out has added to the pressure.
Brenntag executives told reporters that the launch of the infrastructure fund had signaled that Germany was open to investment which will help stimulate growth longer term.
“We need stimuli, we are stuck, so I absolutely support that,” said chief executive Jens Birgersson. “I think construction needs to come up and if we can get a bit of positive input, we can get out of this drop and this stark position.”
Germany has introduced a series of major fiscal measures to stimulate its economy, including a 500-billion-euro infrastructure fund and a 46-billion-euro tax relief package to support businesses through 2029.
EUROPE NEEDS STRONGER ACTION TO TACKLE CHEMICAL OVER-CAPACITY
Birgersson said Europe still lacks a policy to curb chemical over-capacity from China, which has become a major exporter to the region after U.S. tariffs. He said that the European region faces a “massive cost disadvantage” on energy, as industrial policies to secure cheap power have not been implemented.
China’s strong competitiveness is hurting German and European chemical producers, Birgersson added.
“The fact is today that China is the biggest importer of chemicals in Europe, and for the products that are not very bulky, they can shift it, they can be extremely competitive, and that hurts German and European chemical principles,” he said.
The chemical sector is facing an increasing competition from China, which has intensified after tariffs turmoil, as the European market has become more attractive for Chinese peers instead of American markets.
(Reporting by Ozan Ergenay and Marta Frackowiak in Gdansk, editing by Matt Scuffham)
