Business expansion in emerging markets
In the years ahead, we want to grow even more vigorously in the emerging markets and expand our position there. Today’s emerging markets are expected to account for around 60% of global chemical production in 2020. We want to benefit from the considerable growth in these regions and plan to invest more than a third of our capital expenditures there between 2011 and 2020.
In 2014, emerging markets once again saw substantially faster growth rates than the industrialized countries, although the pace was slower than in the previous year. While momentum decelerated only marginally in Asia’s emerging markets, the South American economy stagnated. Growth in Brazil was weak; Argentina experienced a recession. Eastern European emerging markets posted only slow overall growth, as well. Russia’s economy slowed down enormously due to the crisis in Ukraine, declining oil prices, trade sanctions imposed by the European Union and the United States, and the sharp depreciation of the Russian ruble.
Despite higher sales volumes, we observed a slight currency-related decline in our business in emerging markets in 2014: Compared with 2013, sales at our companies headquartered in these countries decreased by 1% to €15,804 million. Based on customer location, sales (excluding Oil & Gas) in emerging markets were down by 1% to €19,242 million year-on-year, also as a result of currency effects. Sales to customers in emerging markets therefore amounted to around 33% of total sales (excluding Oil & Gas) in 2014. By 2020, we aim to expand this proportion to 45%.