Germany’s industrial heartland is coming back to life
INTERNATIONAL - Steam billows from chimneys, and hissing sounds mix with hammering and drilling from a sprawling construction site that represents a $450 million wager on Germany’s industrial future.
In the country’s Rust Belt — dotted with shuttered coal mines and struggling steel mills — Evonik Industries AG is building a plant to make a material the chemicals company believes will become the gold standard for industrial-scale 3D printing.
The project in a Ruhr Valley industrial hub three times the size of Monaco offers a lifeline for the local economy and could serve as a case study on how to apply Germany’s old-school engineering to a new era.
But it also reflects the risks looming over the country’s economy. The printing technology, capable of churning out everything from shoe soles to auto parts in micro-factories, could upend the traditional manufacturing that underpins German affluence.
And despite the hefty investment, the highly automated plant will sustain only 150 jobs — a stark contrast to the massive manpower required for the region’s aging industrial base. Still, that’s better than nothing for the city of Marl, which beat out locations in Thailand and Singapore to land the site.
“Getting this new plant, and such a high level of investment, secures our future,” said Werner Arndt, Marl’s mayor.
The factory draws a line to German tradition. The site is 130 miles north of Mainz, where more than 500 years ago Johannes Gutenberg invented the printing press, ushering in an era of mass communication.
Germany was an early adopter of 3D printing, even as traditional press makers such as Heidelberger Druckmaschinen AG and Manroland AG struggled with the decline of the newspaper industry. Eos GmbH, based near Munich, is one of the world’s leading manufacturers of 3D printers. Every third industrial company in Germany uses the technology, according to a study by digital lobby Bitkom.
The hope is that 3D printing, which gives companies unrivaled design freedom, can unleash a similar technology overhaul to make manufacturing more flexible. That in turn could pose a challenge to the country’s machine makers if they fail to adapt.
The factory will make a pulverized plastic that will serve as the toner equivalent for 3D printers from the likes of Eos, HP Inc. and 3D Systems Corp. It’s a bold bet at a time when Europe’s largest economy is struggling to overcome a slump that has forced companies such as Siemens AG and Daimler AG to announce more than 100,000 job cuts this year.
Germany is under pressure to reinvent itself. Trade wars, a rapid shift to digital technologies and China’s ambition to become the world’s leader in high-end manufacturing threaten its economic model, and the country’s automakers are particularly exposed to the gradual phase out of the combustion engine.
Germany’s worst manufacturing downturn in a decade is set to drag on economic growth at least through next year as domestic demand feels the pinch of the cooling labor market, according to the country’s central bank. The Bundesbank last week cut its 2020 growth forecast for Germany in half to 0.6%.
The new Evonik plant — an expansion of existing facilities — is critical for the Ruhr, where unemployment is nearly twice the national average.
The factory will churn out Polyamide 12, a plastic that can cope with extreme temperature swings, resist corrosion and function in high-pressure environments. While the material has been used for decades in everything from car pipes to dishwasher baskets, Evonik fine-tuned its composition for use in 3D printers.
The likes of General Electric Co., Airbus SE and BMW AG use the printing machines to make components for turbines, planes and cars, while medical companies have printed everything from scalpels to prosthetic limbs. More is expected, with the 3D printing industry’s sales projected to more than triple to over $35 billion in 2024, according to consultancy Wohler’s Associates Inc.
“We’re at the beginning of a new technology,” said Wolfgang Diekmann, who develops Evonik’s 3D printing powders at a lab in the Marl chemicals park — a cluster of facilities that dates back to the 1930s. “Evonik needs to remain agile to keep pace with the market’s rapid development,” he said at the site, where wardrobe-sized machines spit out complex prototypes.
Despite its promise, the technology still needs to clear many hurdles — including speed, cost and environmental impact — before 3D printing can replace other types of manufacturing on a large scale. Evonik says it’s looking at ways to recycle the powder and this year introduced a new version that it says “significantly” reduces waste.
The new plant will start operating in 2021 and increase Evonik’s Polyamide 12 production capacity by more than 50%. Aside from 3D printing, Evonik is also marketing the compound for uses such as components for electric cars and oil and gas pipes.
Marl, which saw its last coal mine close in 2015 after more than a century in operation, beat Asian locations in part because it leveraged its links to nearby suppliers and customers and offers a pool of skilled workers. That positions the city of about 90,000 in something akin to an industrial version of Silicon Valley.
“The expertise and experience is already here,” said Ralf Duessel, responsible for high-performance plastics at Evonik.
About 10,000 people work at the chemicals park, which includes its own power station, rail connections and inland harbor. Evonik gets the main raw material for Polyamide 12 from a nearby supplier via direct pipeline.
“The chemicals park is the economic backbone of our city,” which is also converting a nearby decommissioned mine to woo more manufacturers, said Arndt, Marl’s mayor. “There’s hardly a family here without ties to it.”