INDUSTRY OVERVIEW

The Plastics Industry in Germany

Issue 2015/2016
THE PLASTICS INDUSTRY IN GERMANY

The industry plays a major role in providing new and in-

GERMANY – EUROPE’S LEADING novative products and solutions to a number of key in-
PLASTICS NATION dustries including the automotive, mechanical engineer-
ing, packaging, electrical engineering, and construction
Plastics are an essential part of modern life. Increased sectors. Growth (carbon composites) and future (INDUS-
living standards, growing environmental awareness, TRIE 4.0) market trends are also making themselves felt
and sustainable development thinking are driving the in the domestic plastics sector. Germany is setting the
demand for new and innovative material solutions. international standard as a plastics industry location,
Plastics are everywhere, and often in the unlikeliest of with the country’s leading-edge network of Chemical
places: in housing and construction, in wind turbines Parks and unique cluster concept providing industry ac-
and solar panels, and even in state-of-the-art sporting tors with swift and easy access to all parts of the plastics
apparel. As Europe’s largest producer of chemicals and industry value chain.
plastics, Germany is Europe’s leading plastics industry.
The country’s plastics industry includes polymer man-
ufacturers, converters and machine manufacturers
alike. And with sales of over EUR 90 billion, the domes-
tic plastics industry counts as one of Germany’s most
important industry sectors. Sweden Finland
lane >

Russia
3 h by p

Helsinki

Norway
Stockholm Tallinn Moscow
Oslo
Estonia
1.5 h >

Riga
Latvia

Denmark Lithuania
Minsk
Copenhagen Vilnius
RU
Dublin Belarus

Ireland
UK Warsaw
Berlin
Kiev
London Amsterdam
Poland
Netherlands
15 h > 30 h by train >
GERMANY
Belgium
Brussels
Prague Ukraine
Luxembourg Czech Republic
Slovak Moldova
Paris
Republic
Chisinau
Vienna Bratislava
France
Austria Budapest
Bern Hungary Romania
Switzerland
h Slovenia
<12 Zagreb
Ljubljana Croatia Bucharest
Serbia
Bosnia- Belgrade
Herzegovina Bulgaria
uck Sarajevo
tr Montenegro Kosovo Sofia
by Pristina Skopje
h Italy Podgorica
24 Macedonia
< Rome Tirana
Portugal Albania
Madrid
Lisbon Turkey
Greece
Spain
Cartography: www.fotolia.de – ©António Duarte

Athens
Source: ©Germany Trade & Invest 2012

Malta
Valletta
 Industry Overview 2015/16 www.gtai.com

THE INDUSTRY IN NUMBERS Structure of the Plastics Industry in Germany 2013 *

INTERNATIONAL MARKET DEMAND

AND PRODUCTION Number of Employees Sales
companies (in thousand) (in EUR billion)
The global plastics industry has recorded average annu-
> 6,940 375 90+
al growth of nine percent since 1950. In the past 30 years
alone, international plastics production has grown by Plastics and rubber machinery > 200 27.5 6.5
around 500 percent. World plastics production ramped Plastics processing
up from 1.5 million tons in 1950 to almost 300 million Plastics production
58
tons in 2013. According to the PlasticsEurope Market >6,500² 310
Research Group (PEMRG), global plastics materials de-
mand is forecast to grow 3.7 percent per annum for the
1
26.7
period 2012 to 2017. 240 37.5
*Figures are rounded
Source: PlasticsEurope, VDMA, VCI, GKV 2014
EUROPEAN MARKET DEMAND AND PRODUCTION
The European plastics industry has generated total 1

2
including compound and masterbatch manufacturers
including all registered companies (commercial register)
annual sales of over EUR 300 billion in the last three
years. Europe accounts for around 20 percent of global
plastics production (50 million tons in 2013). To provide Germany’s plastics and rubber machinery companies
some context, China and the NAFTA trade bloc are re- are world leaders. In 2013, they employed a labor force
sponsible for 25 percent and 19 percent of global plas- of 27,500 people in more than 200 companies - gener-
tics production respectively. ating sales of EUR 6.5 billion. According to the VDMA
engineering industry association, sales are expected to
With plastics demand of around 46 million tons per year, increase to more than EUR 7 billion through to 2015.
the European market belongs to the biggest markets in The growing domestic market is characterized by high-
the world. The market is best characterized by a high quality requirements of the end consumer. Within Eu-
level of demand for quality and performance which has rope, Germany is the leading market, accounting for
proven attractive with international investors. Four Eu- around 25 percent of plastics demand.
ropean countries count among the top ten destinations
for global plastics and rubber foreign direct investment HOME MARKET EUROPE
(FDI), with Germany leading the way in the vanguard of More than 12 million tons of plastics produced in Ger-
European countries. many found their way to export markets in 2013, with
around 8.5 million tons of foreign plastics making the
GERMAN MARKET DEMAND AND PRODUCTION reverse journey into the country. With 72 percent of all
The German plastics industry generates sales in the exports, the European single market (EU-28) is the big-
region of more than EUR 90 billion each year. The in- gest recipient of German plastics, followed by the re-
dustry is made up of around 7,000 companies in total. maining countries in Europe (12 percent) and Asia (10
These companies employ a workforce of about 375,000 percent). All told, German plastics exports generated
people. The industry enjoys more than six percent turnover of almost EUR 33 billion (equivalent to 3.6 per-
share of domestic industrial production. cent of total German exports).

The German plastics production market, with 240 com- Within the European single market, the main import-
panies and 37,500 employees, generated sales of EUR ers of German plastics are Italy, France, Poland, and
26.7 billion in 2013. Germany is home to more than the Netherlands. Germany is also one of the largest im-
6,500 companies active in plastics processing. They porters and processors of plastics materials - 87 per-
can call upon a workforce of around 310,000 people. In cent of all plastics imported in 2013 came from EU-28
2013, plastics processing companies reached sales of countries (91 percent across Europe).
around EUR 58 billion.

3
INCREASED GLOBAL PLASTICS Top EU-28 Plastics FDI Destination Countries by Project Share*
DEMAND Others 24%

Global plastics demand is forecast to grow five percent

annually through to 2015 as a result of global mega- Slovakia 3%
trends including urbanization, energy demand, climate Romania 3%
Germany 19%
change, and new technology developments. The differ- Netherlands 4%
ent megatrends driving growth are closely linked to in- Hungary 4% Total
projects: 900**
dustry sectors including construction, energy efficiency Czech Republic 5%
and housing - areas in which plastics are playing an
Spain 6% UK 9%
ever-increasing role.
France 8%
According to research conducted by PEMRG, per capita
Russia 7% Poland 8%
plastic materials consumption has reached the 100 kg
level in western Europe and the NAFTA region. This fig- *January 2008-June 2014

ure is expected to grow to around 140 kg by 2015. Inter- Source: fDi Markets, GTAI Research 2014
** Listed projects fDi Markets: 900 (plastics, rubber, fiber, plastics machinery)
nationally, the greatest growth is predicted in the de-
veloping Asian nations. Within Europe, the developing
economies of central and eastern Europe that consti-
European Plastics Materials Demand 2013
tute the new EU member states are expected to record
the highest increase levels. Other Western European
countries 12%
EUROPE’S NUMBER ONE PLASTICS INDUSTRY
Other Central European
Centrally situated in Europe, Germany is optimally located Germany 25%
countries 9%
to meet the new business opportunities presented by cur-
rent market developments. At present, Europe accounts
Poland 6% Total
for one fifth of total global plastics consumption. It is demand: 46 mn t
forecast to maintain current consumption levels in global Spain 7% Italy 14%
comparison throughout the end of 2015. As Europe’s
number one plastics location, Germany enjoys a global
UK 8%
plastics production share of around eight percent.
Benelux 9% France 10%
Germany is a major FDI destination country for compa-
Source: PlasticsEurope Market Research Group 2014
nies in the whole plastics industry value chain - in both
international and European comparison. Germany oc-
cupies third place in terms of international plastics FDI Within Europe, Germany is the undisputed leader in
attractiveness, and has been Europe’s leading plastics terms of both plastics manufacturing production and
FDI nation for the last decade. The German plastics in- sales. It comes as little surprise then, that Germany is
dustry produces for the international market with the also Europe’s best-served country in terms of available
added advantage of having the European market as its plastics production facilities. It also records the high-
home market. est level of plastics demand by converters (i.e. demand
expressed as tonnage of virgin resin).
International companies have also been setting up
businesses along the entire carbon fiber-reinforced
plastics (CFRP) idea-innovation-implementation chain,
investing in German companies and entering into col-
laborative efforts with German firms and research in-
stitutions.

4
 Industry Overview 2015/16 www.gtai.com

VALUE CHAIN BENEFITS

THE PLASTICS VALUE CHAIN Germany’s unique industry value chain infrastructure
secures the country’s position as Europe’s leading “val-
As a cross-sectional material, plastics are vital to
ue added at factor cost” and “gross investment in fixed
technological innovation: without them the basic ma-
assets” plastics processing nation. As well as benefit-
terials required to make and realize new innovations
ing from the highest standards and industry leadership,
simply would not be available. The plastics industry in
investors in Germany’s thriving plastics sector are able
Germany operates from a position of strength. Innova-
to take advantage of excellent partnership and synergy
tive plastics production and processing companies (i.e.
opportunities. New investors are provided with unpar-
plastics compounders and plastics converters) located
alleled access to local enterprise partners; domestic,
in Germany play a significant role in shaping the global
regional, and international markets; state-of-the-art
plastics market; that they are able to do so is testimony
chemical competence center and cluster infrastruc-
to the country’s highly developed plastics industry value
ture; and a truly world-class R&D network.
chain infrastructure. Networks within the value chain
encompass the different steps of the value chain (verti-
SUSTAINABLE SOLUTIONS AND MARKET GROWTH
cal networking) as well as those of the different sectors
Germany’s unique value-chain system recognizes the
and disciplines (horizontal networking). As a result, in-
fact that plastics not only make sustainable solutions a
novations with a particularly high value chain potential
reality, but that they are also a long-term driver of mar-
are created. These are accordingly transformed into
ket growth. For that reason, innovative networks and
marketable products and services.
chemical-plastics industry clusters are present along
the whole value chain of raw materials suppliers, plastics
WORLD INNOVATION LEADER
manufacturers, plastics processors, plastics machinery
Complete industry value chain presence ensures that
manufacturers, product distributors, and plastics end-
new and innovative products are made to the highest
of-life businesses. Around 400 machinery and plant engi-
possible technological standards. More than 2,800
neering companies have signed up for the “Blue Compe-
chemistry-related patents granted at the European
tence” (www.bluecompetence.net) initiative to increase
Patent Office in 2013 make Germany the third largest
energy efficiency and plastics recycling quality.
inventor of chemicals after the US and Japan.

The Plastics Value Chain in Germany

The entire value chain is available – with the highest integration and based on state-of-the-art technologies and infrastructure.

Plastics Machinery Manufacturers

Plastics Producers Plastics Compounders Plastics Converters

RAW MATERIAL SUPPLIERS (manufacturing different (plastics formulations: mixing (form the plastics resins and com-
types of plastics resins) blending polymers and additives) pounds into finished products)

Plastics Products Plastics End-of-Life Business

Distributors/Users (waste management companies/
(application industry/OEM recyclers and energy from
manufacturers and retailers) waste operators)

Research and Development

(universities, companies and non-university institutes)

National and international chemicals and plastics clusters and innovative networks along the entire value chain.

Source: PlasticsEurope, Germany Trade & Invest 2014

5
MARKET APPLICATIONS AND Plastics Consumption in Germany by Segment 2013
SEGMENTS Furniture 4% Agriculture 3%
Housewares 3% Medical 2%
Plastics continue to play a defining role in finding inno-
vative and forward-looking solutions to the way we live. Electrical / Electronics 6%
Other 13%
Whether in the automotive sector, construction, pack-
aging, or even in the field of health care products, the Automotive 10%
plastics industry is creating new and profitable busi-
Total: around 12 mn t
ness opportunities in numerous application markets.
Packaging 35%
Carbon fiber-reinforced plastics (CFRP) application is Construction 24%
virtually unlimited, ranging from lighter prostheses
to faster canoes and more durable rebars (reinforcing
bars). CFRPs are primarily deployed in the automo-
tive, aerospace and wind energy sectors – areas where
Source: Consultic Marketing & Industrieberatung 2014
Germany has successfully positioned itself as a global
leader.
OPPORTUNITIES
Major opportunities abound for companies active in the
PACKAGING packaging sector. In 2013, over 19 million tons of pack-
aging materials from glass, metals, paper, and plastics
MARKET
were produced. With 42.5 percent of the German pack-
Within Europe, more than 50 percent of all goods are
aging market by production value (paper 33.2 percent,
packaged in plastics. According to PlasticsEurope, ma-
glass 7.8 percent, and metals 16.6 percent), plastics en-
jor efficiencies achieved in plastics packaging mean
joy a significant share of the packaging materials mar-
that, by weight, plastics account for only 17 percent of
ket. The food and beverage sector is a major application
all packaging.
market. Increased demand is also forecast for packag-
ing films, hollow bodies, closures, cups, and cans.
Packaging is the largest plastics application market seg-
ment, with 35 percent of total plastics processing find-
ing its way into the packaging sector. According to the IK BUILDING & CONSTRUCTION
(“The Plastics Packaging Industry Association”), the in-
dustry sector in Germany had a production capacity of MARKET
4.3 million tons and sales of EUR 13.6 billion in 2013. Construction is the second largest plastics end-user
The share of plastics packaging in the whole packag- application industry with 24 percent of plastics pro-
ing market has been growing constantly in recent years duction. Plastics are indispensable to modern build-
and currently stands at 42.5 percent in production value ing construction due to their durability, easy handling,
terms. As such, plastics packaging is the best-selling and high performance characteristics as well as lower
material in the packaging market. maintenance costs. Windows, doors, pipes, façade, and
energy-efficient insulation elements are but a few of
New technologies and improved processes are creating the more obvious examples from the long list of poten-
greater efficiencies which are making plastics packag- tial plastics construction applications.
ing more attractive. Plastics also provide a ready solu-
tion to environmental challenges and ensure the safe OPPORTUNITIES
and hygienic transportation of water, food, and other Current trends and major growth opportunities in the
consumer goods in an increasingly urbanized world. construction industry can be found in the energy-effi-
The family of bio-based plastics (“bioplastics”) is also cient construction materials segment. A large share of
gaining in terms of market attractiveness thanks to in- energy savings is realized through the use of plastics-
creased functionality factors. derived thermal insulation materials. Another growth
market is the global plastics pipe industry which will
see double-digit growth over the next 10 years.

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 Industry Overview 2015/16 www.gtai.com

OPPORTUNITIES
ELECTRICAL & ELECTRONICS Worldwide, there are currently more than one billion
vehicles in use today. This figure is expected to double
MARKET
to more than two billion vehicles by 2030. Polymer prop-
With more than 840,000 employees and sales of EUR
erties and relatively simple processing at low temper-
167 billion according to the ZVEI (“Central Association of
atures promote use in many areas of modern car en-
the Electrical Engineering and Electronics Industry”),
gineering. Increasingly more auto manufacturers are
the electrical and electronics (E&E) industry counts
turning to plastics and composites in order to achieve
as one of the biggest industry sectors in Germany. Af-
better fuel efficiency levels in accordance with CO2
fordable and durable plastics are all around us, having
emission reduction requirements. As well as improved
helped revolutionize the way we live today. The average
fuel economies and lower greenhouse gas emission
plastics content in E&E devices is around 20 percent
levels, plastics allow multiple auto parts to be consoli-
of weight. Plastics’ excellent insulating properties and
dated; creating real cost savings for the auto industry.
flexibility are ideal for use in the electrical goods and
High R&D investment levels are crucial to the automo-
electronics sector. Germany’s E&E sector accounts for
tive sector’s continued success, with research in new
six percent of the total plastics consumption market.
and advanced materials (e.g. lightweight construction)
an important component. Technological advances are
OPPORTUNITIES
increasingly taking place on the side of the supplier
The global E&E industry is the world’s fastest-growing
which is transforming the traditional OEM business
industry sector, and the fourth largest in Germany by
model. Plastics and composites manufacturers have
revenue. Plastics are also playing an important role in
adopted the role of innovator to constantly develop new
global efforts to develop novel electronic devices using
solutions for the automotive industry.
organic functional layers suited to simple and low-cost
products. Organic electronics (also “printed electron-
ics”) products have already hit the market in the guise MEDICAL
of OLED displays and polymer solar cells. German re-
search institutes like the Fraunhofer Institute for Ap- MARKET
plied Polymer Research are making exciting research Germany is Europe’s largest market for medical devic-
advances in polymers with electrical and optical char- es and the world’s third largest. With overall turnover
acteristics for high-technology applications. Further in the EUR 23 billion region and a workforce of around
development opportunities in the field of 3D printing 190,000, the medical technology sector is a cornerstone
technologies also arise. of the German economy. According to BVMed (“German
Medical Technology Association”), companies in the
medical devices sector recorded a 2.6 percent increase
AUTOMOTIVE (EUR 15.5 billion) in international turnover. In 2013, the
industry’s export ratio reached a peak of 68 percent.
MARKET
Medical use of plastics accounts for more than two per-
German automobile manufacturers produced more
cent of the plastics market.
than 14 million cars in 2013 – equivalent to more than
17 percent of worldwide production. Domestically, the
OPPORTUNITIES
auto sector remains the country’s most important eco-
Modern medicine depends on an array of plastics-based
nomic industry sector, and boasts the largest concen-
medical equipment used in general practice. The high
tration of OEM plants in Europe. According to the VDA
acceptance afforded German medical technologies is a
(“German Association of the Automotive Industry”)
clear indicator of the innovative strength of an industry
2014 report, the German automotive industry gener-
exemplified by above-average R&D expenditure levels
ated sales of around EUR 362 billion in 2013 (almost
(around nine percent of total turnover). But it is not just
two thirds of which in foreign markets). Ten percent of
in general medical practice that plastics are making
plastics consumption is generated in the auto sector.
their presence felt; state-of-the-art orthopedic pros-
Plastics contribute up to 15 percent of the body weight
theses and even artificial organs are increasingly being
of new cars. Lightweight plastics are contributing to
manufactured from plastics. Polymers are also being
make cars more eco-friendly, safer, and comfortable.
used in the treatment of extensive wounds to reduce
skin grafts levels.

7
R&D INFRASTRUCTURE

INNOVATIVE CLUSTER Selected Plastics Industry Clusters, Innovative Networks,

Centers of Excellence, and Pilot Plants
CONCEPT – WORLD-
CLASS KNOWLEDGE
TRANSFER
Germany’s unique industry cluster
concept has created an environment
in which operators from all sectors
are able to flourish in close proximity
with other industry actors and inve-
stors, academic institutions, and re-
search centers. The German federal
government’s cluster strategy en-
compasses the following activities:
Competition to promote exchange
„

processes between universities

and companies
INSTITUT FÜ
ÜR
Region-specified measures to
„ KUNSTSTOFFFVERARBEIT
AN DER
ER RWTH
VERARBEITUNG
RWTH AACHE
AACHEN
EN

foster the development of clusters

Measures to foster the develop-
„

ment of clusters in individual fields

of technology
Cross-industry competence
„

creation
Cutting-edge cluster competition
„

INNOVATIVE PLASTICS
INDUSTRY NETWORKS
Source: Economic development agencies of the individual federal states,
Clusters in the plastics industry are Germany Trade & Invest Research, Cluster and Competence Center 2014
typically integrated in multi-produ- ©
Germany Trade & Invest, 2015
cer sites overseen by a third-party
management company responsible
for the efficient running of all onsite “Industrial clusters and a strong research base are major success factors in the Ger-
services and utilities. There are over man plastics industry. The fact that Germany can successfully conduct research, de-
40 regional clusters, innovative net- velopment and production for the world market is due in part to the classic benefits
works, and competence centers in Germany offers as a business location: well-trained, highly-qualified and motivated
plastics and material sciences in Ger- employees, political stability and the ability to make long-term plans, as well as a
many. The chemical and plastics clus- long-standing tradition of good labor relations, decent infrastructure and a strong
ters and their innovative networks focus on quality.”
and competence centers span the
Dr. Josef Ertl, Chairman, WVK - Plastics Industry Association
entire value chain of the plastics in-
dustry, providing unparalleled know-
ledge transfer opportunities and SPECIALIZED CHEMICAL PARKS The Chemical Parks and sites con-
market impulse. Effectively building There are currently around 60 che- cept allows investors to easily “plug
a partnership bridge between aca- mical sites in Germany, of which 37 into” and access all of the necessa-
demia, commerce, and industry, clu- are organized as so-called „Chemi- ry infrastructure resources they re-
sters promote shared dialogue and cal Parks.“ Of these, 28 specialize in quire – and all without the financial
innovative technology partnerships polymer manufacturing and plastics costs of a greenfield investment.
between science and industry. processing.

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 Industry Overview 2015/16 www.gtai.com

INTERNATIONAL R&D Innovation Performance of European Countries 2014

LEADERSHIP 0 0.2 0.4 0.6 0.8 1

Germany is Europe’s leading R&D investment nation. Switzerland 0.84

Internationally, only the US, Japan, and China have Sweden 0.75
higher domestic R&D budgets. Germany is also a lead- Denmark 0.73
er in terms of R&D investment as share of GDP: with a Germany 0.71
three percent level above the 2012 OECD average of 2.4 Finland 0.68
percent. Luxembourg 0.65
Netherlands 0.63
According to the European Innovation Union Scoreboard Belgium 0.63
2014, Germany is the fastest growing of Europe’s leading 0.61
UK
innovation nations. The report also singled out Germany
EU-28 0.55
as being particularly strong in terms of the number of
Czech Republic 0.42
“innovators” (innovative products).
Spain 0.41

R&D INFRASTRUCTURE AND COMPETENCE Note: The “innovation index“ is a composite of 25 indicators measuring innovation, such as public and business
R&D expenditures, educational background, international patent applications.
The chemical industry is by far the most important
Source: Innovation Union Scoreboard (European Union) 2014
source for new materials. As such, it supplies a large
number of industrial sectors with new material innova-
tions. As well as plastics processing, almost all industry This allows international investors to profit from
sectors benefit from preliminary innovation work car- highly scalable R&D potential (industry cooperation
ried out by the chemical sector. and strategic partnership). Germany’s world-class
research landscape includes a significant number of
Investments in innovation (including R&D and capital polymer and materials science research institutes.
investments) account for almost nine percent of annual Based on the Federal Ministry of Education and Re-
turnover. In 2013, the German chemicals industry spent search (BMBF) research and innovation study 2014 and
EUR 10.5 billion on R&D – equivalent to almost one Germany Trade & Invest research, this impressive list
fifth of total German industry R&D expenditure. R&D includes:
activities located in Germany are international in na-
33 university institutes
„
ture, playing a key role in the global research program
12 university of applied science institutes
„
activities of international chemical industry operators.
2 Max-Planck Society (MPG) institutes
„
Plastics and rubber processors have consolidated R&D
12 Fraunhofer Association (FG) institutes
„
spending in the last 10 years, helping establish Germa-
3 institutes of the Helmholtz Association of
„
ny’s plastics processing sector (with R&D expenditure
German Research Centres (HGF)
of around EUR 956 million in 2012) as the undisputed
4 Leibniz Association (WGL) institutes
„
European number one. Around six percent of plastics
10 federal and national R&D institutes
„
and rubber machinery manufacturer annual turnover
was spent on R&D and capital investments in 2012.
Academics and scientists have formed the Plastics
Technology Scientific Working Group (WAK) for the fur-
INDUSTRIE 4.0 application potential is also being used
ther promotion and development of plastics technology
to allow efficiency improvements in plastics process-
in Germany.
ing. Non-university based applied research institu-
tions, competence centers and pilot projects provide
mainly small and medium-sized plastics processors
with unparalleled access to cutting-edge research in-
frastructure and expertise. In the field of composites,
the Fraunhofer Materials and Components Group com-
bines the expertise of 12 Fraunhofer institutes and is
the most important “Fraunhofer Alliance” in terms of
research budget.

9
INVESTMENT CLIMATE

STABLE INVESTMENT University Students in Maths, Sciences, IT,

and Engineering Programs 2012
CONDITIONS
Finland 34%
WORLD-CLASS ENGINEERS
Germany 33%
Germany’s chemical and plastics sector is internationally
Portugal 29%
admired for the quality of its workforce. Over 30 percent
Spain 26%
of German university graduates have a scientific or en-
Austria 26%
gineering degree background (2012). Germany’s rate of
France 25%
employees in science & technology is above 35 percent;
Czech Rep. 25%
making Germany a world leader in rates of technicians
Slovak Rep. 23%
and scientists among total employees. The success of
Poland 23%
the German plastics industry is largely based on exper-
UK 22%
tise and innovativeness employed along the whole value
Japan 18%
chain.
USA 16%
Netherlands 14%
EXEMPLARY ACADEMIC NETWORK
Germany provides access to an excellent research 0% 10% 20% 30% 40%
landscape and advanced network of universities highly Source: Eurostat 2014
active in the field of polymer and material sciences.
With strong connections to industry, 33 universities and
Eighty-four percent of Ernst & Young European attrac-
12 universities of applied sciences offer a number of
tiveness survey 2014 respondents consider Germany’s
plastics processing-related study programs (e.g. poly-
transport and logistics infrastructure to be attractive.
mer and material sciences). More than 124,000 students
Another aspect of Germany’s excellent infrastructure
matriculated on engineering, polymer and material
is its extremely reliable electricity supply, which is the
sciences study programs in winter 2013/14. There are
safest in Europe. Germany’s highly developed pipeline
currently more than 260,000 students in plastics pro-
system guarantees stable oil supply from the Mediterra-
cessing-related study programs in Germany. More than
nean, the North Sea, and from Russia. Ethylene and pro-
43,000 students graduated in this field of study in 2013.
pylene pipelines complement the country’s unique che-
Chemicals and plastics companies, R&D institutes and
mical park delivery infrastructure, with Chemical Parks
the industry cluster provide numerous new technology
connected to an advanced pipeline network for natural
training programs for SMEs – providing companies with
gas, naphtha, hydrogen, carbon monoxide, and techni-
an extra competitive edge.
cal gases. This provides unparalleled access to secure
supply of raw materials to the plastics and related indus-
COMPETITIVE LABOR COSTS
tries, and represents a major competitive infrastructure
High productivity rates and steady wage levels make
advantage.
Germany an attractive investment location. Since 2004,
wages have risen in most European countries (EU-28),
BUSINESS-FRIENDLY TAX CONDITIONS
with the growth rate averaging three percent. While
Germany offers one of the most competitive tax systems
some countries – particularly those in eastern Europe –
of the big industrialized countries. The average overall
experienced a rise of more than seven percent, Germany
tax burden for corporations is just below 30 percent. Si-
recorded the lowest labor cost growth within the EU at
gnificantly lower rates are available in certain German
just 1.7 percent.
municipalities – up to eight percentage points less – with
the overall corporate tax burden as low as 22.8 percent in
COMPETITIVE INFRASTRUCTURE AND LOGISTICS EDGE
some cases. Moreover, Germany provides an extensive
Germany’s infrastructural excellence is confirmed by a
network of double taxation agreements (DTAs) ensuring
number of recent studies including the Global Compe-
that double taxation is ruled out, e.g. when dividends are
titiveness Report of the World Economic Forum (WEF)
transferred from a German subsidiary company to the
and investor surveys conducted by institutions including
foreign parent company.
UNCTAD and Ernst & Young. In the IMD World Compe-
titiveness Yearbook 2014, Germany’s distribution infra-
structure is evaluated as the second best worldwide.

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 Industry Overview 2015/16 www.gtai.com

FINANCING & INCENTIVES Incentives in Germany

IN GERMANY Funding Purposes

Investments Working Research & Specific Personnel

In Germany, investment projects can receive financial
Capital Development Purposes
assistance through a number of different instruments.
Besides private sources, these instruments may come Financing supported by any of the following public funding
from different public incentives programs with the pos- instruments (combinations of instruments usually possible)
sibility of program combination available to all compa-
Public Funding Instruments
nies – regardless of country of provenance. They fit the
needs of diverse economic activities at different stages Grants Loans Guarantees Equity Mezzanine Capital
of the investment process. Capital

INVESTMENT PROJECT FINANCING BY

CASH INCENTIVES FOR INVESTMENTS AND R&D
PRIVATE EQUITY
When it comes to setting up production or service facil-
Technologically innovative start-ups in particular have
ities, investors can count on a number of different pub-
to rely solely on financing through equity such as ven-
lic funding programs. These programs complement the
ture capital (VC). In Germany, appropriate VC partners
financing of an investment project. Most important are
can be found through the Bundesverband Deutscher
cash incentives provided in the form of non-repayable
Kapitalbeteiligungsgesellschaften e. V. (BVK – “German
grants applicable to co-finance investment-related ex-
Private Equity and Venture Capital Association”). Spe-
penditures such as new buildings, equipment or ma-
cial conferences and events like the Deutsches Eigen-
chinery.
kapitalforum (“German Equity Forum”) provide another
opportunity for young enterprises to come into direct
R&D project funding is made available through a num-
contact with potential VC partners. Public institutions
ber of different incentives programs targeted at reduc-
such as development banks (publicly owned and orga-
ing the operating costs of R&D projects. Programs op-
nized banks which exist at the national and state level)
erate at the regional, national, and European level and
and public VC companies may also offer partnership
are wholly independent from investment incentives.
programs at this development stage.
At the national level, all R&D project funding has been
concentrated in the High-Tech Strategy to push the de-
INVESTMENT PROJECT FINANCING BY BANK LOANS
velopment of cutting-edge technologies. Substantial
Debt financing is a central financing resource and the
annual funding budgets are available for diverse R&D
classic supplement to equity financing in Germany. It
projects.
is available to companies with a continuous cash flow.
Loans can be provided to finance long-term invest-
LABOR-RELATED INCENTIVES
ments, working capital and operational costs (R&D,
After the location-based investment has been initiated
personnel) and for bridging temporary financial gaps.
or realized, companies can receive further subsidies
for building up a workforce or the implementation of
Besides offers from commercial banks, investors can
R&D projects. Labor-related incentives play a signifi-
access publicly subsidized loan programs in Germany.
cant role in reducing the operational costs incurred by
These programs usually offer loans at attractive inter-
new businesses. The range of programs offered can be
est rates in combination with repayment-free start-up
classified into three main groups: programs focusing
years, in particular for small and medium-sized com-
on recruitment support, training support, and wage
panies. These loans are provided by the state-owned
subsidies respectively.
KfW development bank and also by regional develop-
ment banks.
Please visit our website for more incentives
information: www.gtai.com/incentives

11
SUCCESS STORY

MOLD HOTRUNNER ”We decided to set up our European subsidiary in Würzburg in

SOLUTIONS INC. (MHS) order to be close to German industry clusters and R&D institu-
tions as well as to our customers in southern and western Eu-
COMPANY INFORMATION rope. Thanks to the professional advice and support provided
Mold Hotrunner Solutions Inc. (MHS) is an advanced by Germany Trade & Invest and our local partners, we were
manufacturing company specialized in providing inno- able to implement our plans in just six months. Their expertise
vative, high-performance injection molding systems. regarding laws and regulations was of particularly high value
Since 2002, when MHS started its business operations to us. Through our office in Würzburg we are able to provide
in Ontario (Canada), the company has been providing fast and reliable services from the center of Europe. The posi-
customers with a variety of products and services. The tive feedback from our customers has confirmed our decision
company’s hot runner technologies are widely used and and we look forward to further strengthening our presence in
valued in a number of industries including the automotive, Europe.”
medical, and food sectors. A number of international
Harald Schmidt, Owner and President of Mold Hotrunner
market leaders – including Bosch, Siemens, GE and
Solutions Inc. (MHS), Canada
Coca-Cola – belong to the company’s network of cu-
stomers. The company’s success is built on a research-
driven approach that enables it to constantly develop plastics industry clusters. GTAI also provided the Cana-
new technologies and apply them to customer-specific dian company with comprehensive consultancy services
requirements. specific to company law in Germany, tax and legal consi-
derations, as well as personnel and recruitment issues.
PROJECT INFORMATION GTAI then facilitated contact to Invest in Bavaria and the
In order to continue providing first-class service to its economic development department of the city of Würz-
European customers and to expand company presence burg.
in the European market, MHS decided to set up a sub-
sidiary in Germany responsible for technical support, PROJECT START
sales and services operations in Europe. After deciding to establish a subsidiary in Würzburg in
January 2014, the MHS Heisskanaltechnik GmbH was
GERMANY TRADE & INVEST SUPPORT founded by the parent company in July 2014. MHS is
Initial contact was established between MHS and GTAI confident about the future development of its European
in Chicago in April 2012, with further discussions sche- subsidiary thanks to the subsidiary operation’s advanta-
duled shortly thereafter. In January 2014, MHS decided geous location and close proximity to industry clusters
to set up its subsidiary activities in Würzburg based on and customers in southern and western Europe. The
the city’s close proximity to German plastics industry economic development department of the city of Würz-
clusters and R&D institutes. GTAI provided information burg also remains available to the new company for con-
pertinent to the plastics industry in Europe and German tinued follow-up support.

Project Milestones
Company Mold Hotrunner Solutions Inc. (MHS)
Country of Origin Canada
Industry Injection molding systems
Company Objective Establishment of a new European sales and service office
GTAI Support J
German plastics industry information
J
Company formation information
J
Establishment of contacts to Invest in Bavaria and the Economic Development Department of the City of Würzburg
Initial Contact April 2012
Company Formed July 2014: MHS Heisskanaltechnik GmbH, www.mhs-heisskanal.de

12
OUR INVESTMENT PROJECT CONSULTANCY SERVICES

GERMANY TRADE & INVEST We coordinate site visits, meetings with potential part-
ners, universities, and other institutes active in the in-
HELPS YOU dustry. Our team of consultants is at hand to provide you
with the relevant background information on Germa-
Germany Trade & Invest’s teams of industry experts
ny’s tax and legal system, industry regulations, and the
will assist you in setting up your operations in Germany.
domestic labor market.
We support your project management activities from
the earliest stages of your expansion strategy.
Germany Trade & Invest’s experts help you create
the appropriate financial package for your invest-
We provide you with all of the industry information
ment and put you in contact with suitable financial
you need – covering everything from key markets and
partners. Incentives specialists provide you with
related supply and application sectors to the R&D land-
detailed information about available incentives, sup-
scape. Foreign companies profit from our rich expe-
port you with the application process, and arrange con-
rience in identifying the business locations which best
tacts with local economic development corporations.
meet their specific investment criteria. We help turn
your requirements into concrete investment site propos-
All of our investor-related services are treated with
als; providing consulting services to ensure you make
the utmost confidentiality and provided free of charge.
the right location decision.

STRATEGY EVALUATION DECISION & INVESTMENT

PROJECT MANAGEMENT ASSISTANCE

Business oppor- Market entry Project partner Joint project Coordination and
tunity analysis and strategy support identification management with support of nego-
market research and contact regional develop- tiations with local
ment agency authorities

LOCATION CONSULTING /SITE EVALUATION

Identification of Cost factor Site preselection Site visit Final site

project-specific analysis organization decision support
location factors

SUPPORT SERVICES

Identification of Project-related Organization of Administrative Accompanying in-

relevant tax and financing and incen- meetings with affairs support centives application
legal issues tives consultancy legal advisors and and establishment
financial partners formalities

13
OUR PARTNERS

THE INDUSTRY ASSOCIATIONS The Industry Associations of the German Plastics Industry*
AND ORGANIZATIONS
Germany Trade & Invest works closely with the respec-
tive German industry associations to provide support
to foreign plastics companies seeking to settle in Ger-
many. As a result, these companies are able to benefit
from the competencies of the different professional as- www.wv-kunststoff.org
sociations along the entire value chain.

WVK - WIRTSCHAFTSVEREINIGUNG KUNSTSTOFF

The Wirtschaftsvereinigung Kunststoff (WVK – “Plastics
Industry Association”) is the German body representing
I .
the interests of members drawn from all corners of the
value chain within the German plastics industry. The www.plasticseurope.de www.gkv.de www.vdma.org
WVK is a member of the Bundesverband der Deutschen
Industrie (BDI – “Federation of German Industries”) and *founding members
Source: Individual association websites
enjoys the support of a number of other associations
active in the plastics industry.
GKV – GENERAL ASSOCIATION OF GERMAN PLASTICS
PROCESSING INDUSTRY
PLASTICSEUROPE DEUTSCHLAND e. V.
The GKV is the umbrella organization of the German
PlasticsEurope is a pan-European trade association
plastics processing industry. It represents the shared in-
of plastics manufacturers. The association represents
terests of the around 700 companies of its carrier associ-
more than 100 companies in 31 European countries.
ations (plastics packaging, plastics end-consumer, per-
PlasticsEurope Deutschland e. V. is the association of
formance plastics, and reinforced plastics industries).
plastics manufacturers in Germany (53 members).
VDMA – GERMAN ENGINEERING ASSOCIATION
The plastics and rubber machinery division within the
COMPOSITES GERMANY
VDMA represents the interests of over 200 member com-
The Composites Germany umbrella industry associ-
panies in Germany. Members receive, among other ser-
ation was founded in 2013 by the four organizations of
vices, support in the form of global market information in
the German fiber composite industry: Federation of
the mechanical engineering and client industry sectors.
Reinforced Plastics e. V. (AVK); Carbon Composites
e. V. (CCeV); CFK-Valley Stade e. V. (CFK-Valley);
BVSE – GERMAN ASSOCIATION OF
and the composite Technology Forum within the
PLASTICS RECYCLING
VDMA. The organizations in the German fiber
The bvse - Fachverband Kunststoffrecycling represents the
composite industry want to strengthen the Ger-
interests of the German plastics recycling industry. The
man composite industry (particularly in the field
association has more than 300 member companies who
of research), determine common positions, and
are active across the entire plastics recycling spectrum:
take overlapping interests into account.
from waste to end-product.
Composites Germany is also as a member of the
EuCIA (European Composites Industry Associa-
tion). EuCIA is the umbrella organization of the
European composites industry and represents the
national composites associations in Europe and
their member companies. With over 750 member
companies within these four organizations, Com-
posites Germany is the largest national agency
member.

14
CONTACT

IMPRINT
PUBLISHER
Germany Trade and Invest
Gesellschaft für Außenwirtschaft
und Standortmarketing mbH
Friedrichstraße 60
10117 Berlin
Germany
T. +49 (0)30 200 099-555
F. +49 (0)30 200 099-999
[email protected]
www.gtai.com

EXECUTIVE BOARD
Dr. Benno Bunse, Chairman/CEO
Dr. Jürgen Friedrich, CEO

AUTHORS
Peggy Görlitz, Senior Manager, Plastics Processing, Investor Consulting,
Mechanical & Electronic Technologies, Germany Trade & Invest
William MacDougall, Senior Manager, Marketing & Communications, Germany Trade & Invest

LAYOUT
Germany Trade & Invest

PRINT
Asmuth Druck & Crossmedia GmbH & Co. KG, Köln

NOTES
©
Germany Trade & Invest, January 2015
All market data provided is based on the most current market information available
at the time of publication. Germany Trade & Invest accepts no liability for the actuality,
accuracy, or completeness of the information provided.

Germany Trade & Invest would like to thank PlasticsEurope, the pan-European trade organization
of the German plastics processing industry, for its invaluable support in making this publication.

ORDER NUMBER
15557
 Germany Trade & Invest
Friedrichstraße 60
10117 Berlin
Germany
Peggy Görlitz
Investor Consulting
T. +49 (0)30 200 099-555
F. +49 (0)30 200 099-999
[email protected]
www.gtai.com/plastics

ABOUT US

Germany Trade & Invest is the foreign trade and inward in-
Photo: Pressefoto BASF SE, 09/2009, Basotec®

vestment agency of the Federal Republic of Germany. The

organization advises and supports foreign companies seeking
to expand into the German market, and assists companies
established in Germany looking to enter foreign markets.

All inquiries relating to Germany as a business location are trea-

ted confidentially. All investment services and related publi-
cations are free of charge.

Supported by the Federal Ministry for Economic Affairs and

Energy on the basis of a decision by the German Bundestag.

www.gtai.com