Several major German industry associations are planning to collaborate on the joint procurement of raw materials on the global market, with support from the Federal Government. This initiative, reported by the “Industrie und Handel” newsletter in “Politico,” involves industry groups working towards a shared concept for purchasing essential resources, backed by the Ministry for Economic Affairs. State Secretary Frank Wetzel has invited parties to a meeting scheduled for July 8th.
The consortium includes leading bodies such as the Association of the Automotive Industry (VDA), the Association of the Electrical and Digital Industry (ZVEI), the German Engineering Federation (VDMA), the Federal Association for the German Aerospace Industry (BDLI), and the Federation of German Industries (BDI).
A key aspiration of the industry is the creation of a unified trading house, which would allow the companies to pool their needs and participate as large-scale buyers in the worldwide market. The industry is primarily seeking financial backing from the state. According to the VDA, the initiative aims to develop a concept “based on the Japanese hedging model.” Notably, the Japanese raw material agency, JOGMEC, differs from the German Raw Material Agency (DERA) as it not only possesses geological expertise but also provides capital and invests in global projects.
This effort to establish a joint purchasing concept arises from the industry’s significant reliance on critical raw materials, such as Rare Earths, sourced from China. Smaller companies, in particular, often lack the necessary capital and market leverage to independently establish alternative supply chains.
