Karl-Hans Caprano: High revenue-levels and innovation – the chemical industry in Hessen

Germany is Europe’s biggest chemicals manufacturer and Hessen is a major mainstay of the chemicals manufacturing location of Germany. The chemical industry in Hessen had sales of 21.4 billion euro in 2009.

In Hessen, the chemical industry is the larg­­est single sector ahead of motor vehicle manufacturing, electrical engineer­­ing and mechanical engineering, with a share of sales of 21.3 per cent. Hessen’s chemical industry is internationally oriented. It ob­­tains essential raw materials from foreign markets but – conversely – it sells most of its products to other countries. Hes­­sian chemicals manufac­turers earn some 65 per cent of their sales from exports.


An innovative sunrise industry. The chem­­icals and pharmaceuticals in­­­­dus­­try plays a leading role in research and in­­nova­tion. It not only offers a broad range of products for all areas of life and stages in manufacturing, it also supplies ideas and know-how and thereby influences developments in other branches of in­­dus­­try, from the construction industry through the motor vehicle industry to the manu­facture of com­­pu­­ter­­ chips and flat-screen monitors and TV sets.
The percentage of companies involved in research is higher than in any other sector of the German economy and no other sector transfers as many results of its research into other branches; R&D expenditure is therefore correspondingly high. It increased from 7.1 billion euros in 2000 up to over 8.4 billion euros in 2008. The manufacture of phar­­maceuticals is particularly re­­search-in­­tensive – and this sector is rep­re­sented disproportionately in Hessen. Its share of total sales is almost 50 per cent for Hessen compared to some
24 per cent of the German chemicals industry in general.


Over the past few years, Hessen has be­­come a core region for biotechnology and nanotechnology. Its biotech network has 195 member companies and the nanotech network has 150. These in­­clude lar­­ger, es­­tab­­lished companies that are working on new materials, processes and products, but there is a large number of young companies in particular which are developing innovative ideas into marketable products in the process of developing from being start-ups to be­­coming future-proof industries and which are thereby reinforcing the economic power of the entire region.

Jobs in medium-sized and major companies. Over 58.000 employees work in Hessen’s chemicals and pharmaceuticals industry. However, this does not fully reflect the total number of employees in the in­­dustry. For example, chemicals-related service companies, which developed out of major chemicals manufacturing com­­­panies through outsourcing, are no longer recorded in official industry statistics. Other companies are classified under other sectors due to their main production activities. Hessen’s Em­ployers’ Asso­cia­­tion current­­ly has 296 member companies with over 100,000 employees. Apart from chemicals and pharma­ceuti­cals manufacturers, these in­­clude med­­ical techno­­logy, rubber and plastics com­­pa­­nies along with chemicals-related serv­­ices compa­nies, especially the in­­dus­trial parks in Frank­­furt-Höchst, Wies­­baden, Hanau, Mar­­burg, Frankfurt-Fech­­enheim and Gries­­heim. Not the least of these is an increasing number of companies in­volved in nanotechnology and biotechnology. Hes­sen­­Chemie is thus the chemical employers’ association with the highest number of em­­ployees in Germany.


The chemicals and pharmaceuticals in­­dus­­try has always been a stabilizing fac­­tor for the employment market in Hes­­sen. This applies especially to the 2009 crisis year. For example, the number of em­­ploy­ees in the first half of 2009 was only 0.7 per cent below that of 2008. In pharma­­ceu­­ticals companies there was even a slight increase – as in previous years. In Hessen’s manufacturing industry, overall employment dropped by 2.5 per cent, however.

Hessen’s che­micals and pharmaceuticals industry is predominantly of a medium-sized structure: 84 per cent of member companies have less than 500 employees and are thus classified as small and me­­dium-sized companies (see the diagram on member distribution by company size).



However, the industry also includes a large number of larger companies known both Germany-wide and internationally, such as B. Braun Melsungen, Ce­­la­nese, Clariant, Fresenius, Merck, Sanofi-Aventis and Heraeus. Also typical of Hessen is the concentration of a large number of companies in the six industrial parks in Hessen, which offer a com­­prehensive infrastructure and ideal conditions which allow them to concentrate on their core business.


A future guaranteed by vocational training. Hessen’s chemicals industry sees one central area of activity for the future in the challenges that accompany demo­­graphic change. Only if enough skilled employees are trained and only if older employees stay healthy and can be re­­tained longer, can the requirement for skilled employees be guaranteed over the long term. This is why companies in the industry place much importance on com­­pany-based vocational training. Overall, member com­­panies of Hessen­Che­mie currently train some 4,550 ap­­­pren­­tices/trainees in 40 skilled occupations. In the “Future Through Voca­tional Training” pay agreement, the member companies which are bound to the pay agreement undertook to in­­crease the number of apprenticeships/traineeships by seven per cent in the period from 2003 to 2007 and to maintain this level until 2010. In 2009, the chemicals industry in Hessen had more than 1,500 apprenticeships/traineeships available, more than 17 per cent more than in the year the pay agree­­ment came into force. This is an important contribution to improv­­ing the op­­portu­nities for vocational training for young people and for guaranteeing the number of recruits for skilled labor (see the figure on “a future guaranteed by vocational training”).



CapranoThe author trained as a commercial as­­sistant for industry and formed his first company at the age of 26. He was man­­aging partner of the Techno­form Gruppe. He is spokesman of the partners’ meeting and honorary chairman of the ex­­ec­­utive board of the Employers’ As­­so­­­­ci­­a­­tion for Hes­senChemie and vice-presi­­dent of the Federation of Busi­­nessmens’ Associations in Hessen.