The latest development in the red sea crisis is that Germany chemicals sector is showing signs of adverse impact. The delayed shipments have resulted in supply disruptions which has further led companies to stop manufacturing of chemicals.
Further, imports from Asia have been severely impacted in domains like engineering, car parts, toys and above all chemicals due to attacks by Houthis of Yemen. Tesla’s Berlin company is being the most impacted victim as a result of container shippers being diverted around Africa and giving Red Sea and Suez canal a miss.
The European country is dependent on Asia for about third of its imports from outside the continent. After cars and engineering, the chemicals sector with annual sales of about EUR260bn is the third largest in Germany.
The CEO of Gechem GmbH & Co KG said that their procurement department is presently working three times hard to purchase anything. The company mixes and packs chemicals for larger corporations. The company has slowed down on manufacturing of dishwasher and toilet tablets due to shortage of trisodium citrate and sulfamic acid and citric acid. It earlier made annual sales in double digit million euros.
The company estimates that in H124 the transport problem shall remain and is currently reviewing its three-shift system.
Frank discussions are being held with customers, the CEO stated.
Evonik, a larger chemical manufacturer was also hit by the delays in transit stating that the ships have changed routes atleast three times within a few days.
The company was trying to reduce the impact by ordering earlier and using air transportation system which adversely do not allow all chemicals to be transported.
