Economic turmoil led to sales and profit declines at several major European chemical industry firms in the fourth quarter or all of 2023. Two big challenges for the sector are soft demand for its products and high energy prices. A number of companies, including Germany’s Evonik Industries, see no near-term uplift in market conditions.

Evonik says in its earnings announcement that it will respond to the “continuously challenging” market conditions with a program to cut annual costs by about around 400 million euros ($435 million). As part of the initiative, the firm will eliminate 2,000 jobs, 1,500 of which are in Germany. Many of the jobs will be management positions.

The company recorded a net loss of $159 million in the fourth quarter and a 17% decrease in sales to $4.0 billion. Evonik recorded an even bigger loss for the whole of 2023. “The general conditions will not get any easier, which is why we will continue our fundamental revamp of the group,” CEO Christian Kullmann told journalists at a briefing. “What we are currently experiencing are not cyclical fluctuations but massive, consequential changes of our economic environment.”

Separately, Evonik announced it has agreed to sell its superabsorbent polymer business to International Chemical Investors Group, a private equity firm, for “low triple-digit” millions of dollars. The business had sales last year of about $985 million.

Evonik’s announcement of job cuts follows a similarly downbeat briefing by BASF, which disclosed plans to cut expenditures by about $1.1 billion at its headquarters site in Germany by the end of 2026 because of high costs and slow demand. BASF already has a cost reduction program in place that will affect 700 workers.

Among other major European chemical companies, Arkema, Covestro, and Croda all announced double-digit percent sales declines for 2023. Clariant reported a 7% drop in sales for the year.

The catalyst sector bucked the overall trend. Clariant reported record sales for its catalyst division in the fourth quarter, and the catalyst producer and technology provider Topsoe reported record sales in 2023.

The two main problems facing the wider European chemical sector are disruption to trade due to geopolitical issues and high energy prices, according to a new report from the European Chemical Industry Council (Cefic), an industry association. Cefic estimates that European chemical production fell 8% in 2023 from the year earlier.

“Compared to 2022, the European chemicals industry in 2023 produced less, exported less and imported less. Germany is not yet recovering, and full recovery is still way off for most EU27 countries,” Cefic says, referring to the 27 European Union member states.

Meanwhile, the European industry’s Antwerp Declaration for a European Industrial Deal, an industry-penned action plan that proposes policy changes to make Europe more industry friendly, is securing more executive buy-in.

At the declaration’s launch on Feb. 20, it had the backing of 73 senior industry executives, including the CEOs of some of Europe’s biggest chemical companies. As of March 6, 585 senior executives from 20 industries had signed it. Policy changes the executives are calling for include streamlining legislation, simplifying state aid rules, and fostering demand for sustainable products.