he chemicals that supply the key ingredients to many products used around the world trace their origins to a rapidly growing cadre of manufacturing plants in Saxony-Anhalt, Germany.
      While the chemicals manufacturing cluster in Central Germany dates back over 100 years, much of the factory infrastructure in the region went dormant after the reunification of Germany in 1989.
      That is the case no longer. Spearheaded by massive government support and an influx of entrepreneurial innovators springing out of university laboratories throughout the region, Saxony-Anhalt is staking a claim to become the dominant chemicals manufacturing location in all of Europe.
      The numbers bear that out. With total sales of €6.8 billion (US$9.7 billion) in 2008, the chemicals industry ranks as the second-largest sector in the state, trailing only the food and beverage processing industry. According to the Statistical State Office of Saxony-Anhalt, chemicals sales generated revenues of €5 billion (US$7.1 billion) from January to September of 2008, with 45 percent of those sales coming from exports.
      About 70 companies, each employing 50 or more workers, are engaged in chemicals manufacturing in Saxony-Anhalt, employing more than 15,000 people.
      Major employers in the state include BASF, Dow Chemical, TOTAL Raffinerie Mitteldeutschland, Manilu Stretch, Linde, Bayer and Hi-Bis. These firms make everything from petrochemicals and synthetic rubber to stretch film and technical gases.
      "Saxony-Anhalt as a state is dedicated to chemistry," says Dr. Oliver Seidelmann, managing director of ChiroBlock GmbH in Bitterfeld-Wolfen, the hub of the state's chemicals industry. "There are people, from the local mayor to the state government, who do nothing else but attract people from the chemicals industry and subsidize research parks and R&D. You can receive up to 50 percent of your investment if you build a new factory here, and you can get up to 50 percent for an R&D project."       Seidelmann, whose 15-person chemistry research firm develops specialized molecules for clients like Bayer, Roche, Novartis, Sanofi Aventis and Unilever, says that Bitterfeld-Wolfen is an ideal location for his business.
      "This area was first developed as a chemical site 100 years ago," he says. "Today, it prospers because of several factors. First is the proximity to cities of a half-million people each in Leipzig and Halle. Secondly, the universities in the region have very strong chemistry departments. You can reach Berlin by train in less than one hour, and there are two major universities there that also focus on chemistry."
      Thirdly, Seidelmann notes, Bitterfeld-Wolfen is located in the heart of Germany. "Consequently, we are in the heart of Europe," he says. "Two main railroads cross here: one going from Berlin to Halle and one going from Leipzig to Hamburg. The excellent international airport between Halle and Leipzig is only 15 miles from Bitterfeld-Wolfen. It was rebuilt 10 years ago and has a capacity of 4 million passengers per year." Also, the main autobahn from Berlin to Munich "is directly in the neighborhood of this industrial area. It is one of the main highways in Germany and one of the most important."
      Fourthly, "we have an excellent work force," adds Seidelmann. "There is an excellent school for training production workers. They receive their education here, and it is focused on chemistry. If you are looking to hire people with university degrees, you can benefit by hiring graduates from the universities in Halle and Leipzig. The people here have an aptitude toward chemistry. As a result, young people who are pursuing a career in chemistry choose to remain in this area more so than anywhere else in Germany."
      Seidelmann says his firm is growing at a rate of about 15 percent a year, largely due to its location in ChemiePark Bitterfeld-Wolfen, a 1,200-hectare (2,965-acre) complex that is home to 360 companies and more than 11,000 workers.
      Matthias Gabriel, CEO of Preiss-Daimler ChemiePark Bitterfeld-Wolfen GmbH, says, "The activities in Bitterfeld-Wolfen have many different facets, ranging from laminate to glass fiber and other products." Since 2001, he says, his company has invested €500 million (US$707 million) in infrastructure, buildings and machinery in the park. Investments from companies have totaled an additional €1.5 billion (US$2.1 billion).
      "In contrast to other locations, we have an integrated materials infrastructure," Gabriel says. "This means that dangerous materials do not have to be handled by road or rail, but rather by pipeline and only over short distances. This way of transporting chemicals is very cost-efficient."
      Gabriel adds that his firm can connect companies with financing at banks, plus grants through the state government, the Federal Republic of Germany and the European Union. "For this reason, an optimum of financial support can be expected here," he says.       Seidelmann says another factor cannot be over-emphasized: The region goes out of its way to embrace chemical companies and support their growth. At a time when many government jurisdictions are virtually regulating chemical firms out of existence, this open acceptance of the industry is a huge advantage, he says.
      "We were founded 10 years ago by three chemists who obtained Ph.D. degrees from German universities, but it was difficult to find a place to start this business," notes Seidelmann. "We traveled around Germany and asked if we could rent space. We were told that communities were interested primarily in biotech and information-technology companies. We were told that chemicals were an old-fashioned business. We had trouble finding space in Germany."
      That search ended in Bitterfeld-Wolfen, a location that openly courted and welcomed the fledgling chemical research startup. "The conditions here are absolutely ideal, and every company here benefits from its neighbor," says Seidelmann. "The people here are familiar with the chemistry sector. They are very eager to develop this industry."
      Today, ChiroBlock develops, on average, about 10 new molecules a year for its clients. Since its inception, the firm has developed nearly 200 molecules, including 50 amino acids and 30 sugar components.
      Other firms are experiencing similar success in the region. Puralube GmbH recently completed construction of its second refinery in the 232-hectare (573-acre) Zeitz Chemical and Industrial Park. The company makes high-quality base oils that are used in fuels, diesel, solvents and industrial lubricants.
      The project, completed in late 2008, resulted in 100 construction jobs and 50 permanent jobs at the high-tech refinery in Zeitz, a city of 31,000 people on the tri-state border of Saxony-Anhalt, Saxony and Thuringia.
      Other major chemical sites in Saxony-Anhalt include the 650-hectare (1,606-acre) Dow ValuePark in Schkopau and the 1,300-hectare (3,212-acre) Leuna Chemical Site. More than 100 companies have established chemical manufacturing operations in Leuna and invested €5.5 billion (US$7.8 billion) to date, creating 9,000 jobs.
      In 2009, firms have invested €250 million (US$354 million) into facility projects at Leuna. With €50 million (US$71 million) funding in place, the white biotech research center (CBP) by Fraunhofer-Gesellschaft is set to be a major force in the alternative feedstock innovation drive.
      Firms doing business in Leuna today include BASF, DOMO, Dow, LEUNA-Harze, Linde, Hexion, Taminco and TOTAL.