E_mg_GB_03_vorne-29_3_04

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Engineering and chemical industries unsatisfactory
2003 was a disappointing year for the German engineering sector. At the end of August, the German
Engineering Federation revised downwards its forecast for 2003, which in the fall had still been
predicting just above zero growth for the year as a whole. Instead of stagnating, production fell by
one percent in real terms in 2003.
The chemical industry performed sluggishly in 2003 after the sector was hit by weak demand and
strong pressure on prices. The German Chemical Industry Federation (VCI) expects production in
Germany to rise by only 0.5 percent in 2003.
Performance of mg-relevant markets varies
The performance of mg’s key markets varied in 2003. The food industry, one of GEA’s most important
customers, can look back on an encouraging year. According to the Federation of German Food and
Drink Industries (BVE), sales in Germany’s fourth-largest industrial sector rose year on year by a
nominal 2.3 percent in 2003.
The performance of the international dairy markets relevant to GEA’s dairy farm systems business
varied widely. While Germany and France showed signs of improvement on the previous year, dairy
markets in the U.S. and parts of western Europe suffered from weak milk prices.
Unfazed by the generally poor performance of the chemical industry, the pharmaceutical sector
continued to grow in 2003. According to the German Chemical Industry Federation, German pharmaceutical
companies managed to raise their production by 3.5 percent in 2003.
Business activity in the automotive industry – a major customer for Dynamit Nobel – remained
relatively low in its core European and U.S. markets in 2003. By contrast, Asia – particularly China –
increased its production. According to the German Association of the Automotive Industry (VDA),
the number of new car registrations stagnated in Germany, a total of 3.24 million cars being registered
here in 2003.
Dollar continued to weaken
The dollar/euro exchange rate is of great importance to the currency translation and invoicing of
a large proportion of mg’s business activities. The U.S. dollar continued to weaken during the
course of 2003. One euro cost an average of 1.13 dollars in 2003. The value of the euro had therefore
increased by an average of roughly 20 percent year on year against the dollar.