GERMAN CHEMICAL INDUSTRY SEES LOWER PROFITS

  West Germany's chemical
  industry fears mounting risks will hurt earnings but hopes 1987
  turnover will stabilize around 1986's 140 billion marks, Josef
  Strenger, a board member of the industry association VCI, said.
      Strenger, management board chairman of Bayer AG &lt;BAYG.F>,
  told a news conference at the Hanover trade fair the main
  dangers were stagnation in world trade, the lower dollar as
  well as crude oil and commodity prices.
      Prospects of higher operating costs were also seen harming
  earnings, he said. Turnover took a considerable downturn at the
  start of 1987 after falling 5.9 pct in 1986.
      The chemical industry, which relies heavily on exports, was
  badly hit by mark appreciation in 1986 and lower turnover was
  mainly due to foreign exchange losses, Strenger said.
      Exports fell 6.4 pct to 72 billion marks in 1986 and
  competition from U.S. And British firms increased. Savings from
  lower oil and commodity prices were eaten up by price
  competition and increased costs.
      Strenger said 1986 operating profits of German chemical
  firms were slightly worse than the year before but the improved
  financial and balance sheet structure, after three good years,
  neutralized the negative impact.
      Strenger said the industry would try to increase production
  in the U.S. To make up for lost export possibilities out of
  West Germany.
      The lower dollar was the main reason for an 8.3 pct fall in
  exports to North America, an 11.4 pct drop to Latin America and
  22.6 pct plunge to the Middle East.
      Exports to Western Europe eased 3.5 pct and Far East
  exports, due to an economic revival in Japan, dropped 5.2 pct.
      Strenger noted that the industry had lost public confidence
  following several cases of chemical pollution of the Rhine late
  last year.
  

