PRESSRELEASE

3 July 2008

Chemical industry: 3 percent output growth in the 1st half 2008

VCI expectsslower chemical business in the 2nd half of this year

>> German version

Irrespective of the strong euro and massively rising energy and raw material costs, the chemical industry recorded an output growth in the 1st half 2008. However, growth was noticeably slower in Germany's fourth largest industry: The German chemical industry association (VCI) informed the press in Frankfurt that the chemical output rose by 3.0 percent in the 1st half 2008, so that the growth rate exactly halved compared with the relevant period 2007. VCI expects a further slowdown in chemical business for the coming months but believes that a slump is unlikely. For 2008 as a whole, VCI forecasts an output growth by 2.5 percent and a sales increase by 5.5 percent.

Professor Dr Ulrich Lehner, President of VCI: "We think that the impacts of extremely high raw material and oil prices, the strong euro and the less favourable economic situation in the USA will make themselves felt more heavily in the German chemical industry, especially in business with industrial customers in Europe."All the same, Professor Lehner expects just flatter growth but no decline in production, assuming that the demand for chemicals will remain more or less stable:"Helpful elements in this context are the pharma business, which is not influenced by cyclical developments, and the economies in Asia which continue to grow dynamically."

Producer prices: Since the beginning of 2008, prices for oil and gas have again increased considerably. In the 1st half 2008 the prices for chemicals were 3.5 percent higher than one year earlier.

Sales: In the first six months of 2008, total sales of the German chemical industry rose by 5.5 percent to 88.9 billion euros. Business with customers abroad improved by 6.0 percent to 50.2 billion euros. Domestic sales climbed by 5 percent to 38.7 billion euros.

Foreign trade: In the 1st half 2008 exports – which include foreign sales of chemical companies, re-exports and chemical exports by other industries –went up by 11.5 percent to 70.5 billion euros. Imports rose by 6 percent to 47.8 billion euros, compared with the 1st half 2007.

Employment: Staff figures fell slightly. In the 1st half 2008 the number of persons employed in the German chemical industry averaged 439,000. Thus a drop by 0.3 percent was recorded compared with the situation one year earlier.