FRANKFURT (Reuters) - Demand for the construction of large industrial plants in Germany fell to a 30 year low in 2015, due to a collapse in the market for fossil-fuel generation, engineering association VDMA said on Wednesday.
Domestic orders fell 29 percent to 2.6 billion euros (2 billion pounds), also hurt by a dearth of big projects in process and raw-materials industries due to excess capacity, high energy prices and strict regulation, the VDMA said.
Worldwide demand for large plant construction from VDMA's members remained roughly stable at 19.5 billion euros, bolstered by large orders from Egypt and Russia that compensated for falling demand from China, southeast Asia and Europe.
The VDMA called for Germany's export credit agency, Hermes, to relax its conditions for insuring projects that contain foreign parts, saying its members increasingly have to compete with countries from outside the Organisation for Economic Cooperation and Development with less strict conditions, such as China.
"The possibility to offer attractive financing has become a more and more critical factor in successfully winning industrial plant project business," it said.
The members of VDMA's industrial plant construction group include German companies such as Siemens (DE:SIEGn) and Linde (DE:LING), as well as the German units of foreign groups including ABB (S:ABBN) and Mitsubishi Hitachi Power Systems (T:7011) (T:6501).
Siemens last year won an 8 billion euro power plant deal from Egypt, while Linde won an order worth hundreds of millions of euros for a gas-processing plant in Russia's far east.
The VDMA said it expected stable demand overall this year, with a small possibility of upside from Iran, the United States and southeast Asia.