Interview with Jürgen Vormann, Chairman of the Association of Chemical Parks, VCI
CT: Which are the most urgent issues for German chemical park operators today?
Vormann: The impact of the German energy turnaround and the ensuing cost burden are still the main matter of concern for chemical park operators in Germany. This includes, on the one hand, the topic of heat and power cogeneration: Economic operation of high-efficiency, environmentally friendly CHP plants has become significantly more difficult. And if conditions for heat and power cogeneration in an industrial setting become even worse compared to generation for the German grid when the new CHP law comes into force on January 1, 2016, this could impose severe restrictions on economic operation of industrial CHP units. Energy would have to be generated elsewhere, for example in coal-fired power stations with a lower fuel-utilisation efficiency and correspondingly higher CO2 emission, which would stand in complete contradiction to the goals of the energy turnaround. Another important topic for chemical production sites in Germany and their operators is the financial advantage of producing electrical energy in their own power stations, which is currently being called into question. If exemption from the levy imposed by the German Renewable Energies Act (EEG levy) were to be revoked for electricity produced on-site for own consumption, that would have enormous negative consequences for the chemical industry.
CT: Do chemical parks face other challenges in addition to energy policy issues?
Vormann: Chemical park operators are in the industrial services business and here we have a whole range of issues of common concern to all personnel-intensive sectors. The list begins with general issues of wage agreements, which always subject chemical park operators to enormous competitive pressure from service providers from other sectors of the economy. However, some political decisions of the recent past are also proving to be burdensome. These include the introduction of retirement on full pension, without any deductions, at the age of 63. On the subject of shortage of skilled professionals: Ongoing further education of employees, also to better prepare them for changes in the workplace, and above all recruitment of enough young people for classical apprenticeships are also challenges for industrial services providers. In particular, as chemical park operators we are also concerned with approval issues relating to national implementation of the Seveso Directive. In no way should we jeopardise the developmental potential of chemical production sites in Germany.
CT: Just 18 months ago the shale gas boom and the low energy prices in the USA were seen as posing a serious threat to European production sites. Has the falling oil price caused the pendulum to swing back in favour of the chemical industry and chemical park operators on this side of the Atlantic?
Jürgen Vormann: No, I still see significant disadvantages for the chemical industry based in Germany and elsewhere in Europe. There is a continuing reluctance of chemical manufacturers to invest. This is not solely due to the cost disadvantages linked to energy policy. The lack of planning certainty is a serious problem. Chemical companies and site operators think in time intervals of decades when they invest in new plants. In contrast, in the most favourable cases the half-life of political decisions is measured in legislative periods. That is a problem when it comes to investment. I expect to see a stagnating or slightly declining level of investment for Germany in the years ahead.
CT: Where do you see the competitive advantages of German industrial parks in an international setting?
Jürgen Vormann: Efficiency, quality, qualification – we have an excellent infrastructure at many sites and above all have reached a very high level of efficiency in useful energy generation when it come to plant operation. Huge efforts have been made in this area. However, we can also pride ourselves on a very high level of quality by international standards in many other areas such as waste management, plant safety, or security topics. And in German chemical parks we surely also set standards in matters of environmental protection and sustainability. Even though costs play the principal role, manufacturing companies are paying ever greater attention to sustainability criteria in decisions about location.
The most important assets of companies operating chemical and industrial parks are, however, our employees. We have highly qualified personnel and this is yet another reason why we can meet the very highest quality demands. That is another talent that stands us well in the international arena. From the perspective of the Association of Chemical Parks in the German Chemical Industry Association, I consider it to be our primary task on the one hand to clearly underscore the advantages of German chemical production sites and to advertise their virtues, and on the other hand to resist any deterioration of our competitive situation, whether arising from energy policy or from any other cause.
Even though I am in danger of repeating myself, I must stress that Germany has no future as a business location without industrial value creation. We shall not be able to safeguard our prosperity, let alone increase it, if we only sell one another insurance, provide financial services, or cut one another‘s hair. We need industry, and not least the chemical and pharmaceutical industry as an innovative future segment. And this industry needs suitable production sites with competitive business conditions.
Since 2004 Jürgen Vormann is managing director of Infraserv Höchst, the operator of the Höchst Industrial Park in Frankfurt am Main. Vormann who studied business administration in his hometown of Münster had begun his career in 1990 at Hoechst, worked at Celanese and there he held various management positions. In November 2015 Vormann has taken over the chairmanship of the Association of Chemical Parks in the German Chemical Industry Association (VCI). Vormann was born in 1962. He is married and father of two children.