Industry Europe – Issue 23.7

Page 8

TAKING THE HIGHMARGIN ROAD The European chemical industry is confronted with the prospect of a long wait before it returns to the growth rates in output it enjoyed before the 2008 financial crisis. Sean Milmo reports.

E

urope’s production of chemicals was still in the second quarter of this year around 8 per cent below its peak in early 2008 and was looking unlikely to climb back above the level of 5–6 years ago for some while. In late 2012 the European Chemical Industry Council (Cefic), the main trade association of chemical producers in Europe, was predicting a slight expansion of 0.5 per cent in output this year. But by June its forecasting panel had changed its position with a prediction of a 1 per cent decrease in output in the year mainly because of weaker than expected demand. It will be a second successive year of decline after production fell in 2012 by 1.7 per cent. Demand was particularly fragile in the first part of 2012 in the European Union’s construction and automobile sectors. Sales of new vehicles were being held back by high unemployment and low growth in incomes. The construction sector was still suffering 8 Industry Europe

from the effects of past speculative building keeping construction output at historically low levels. “The EU chemical industry is still facing headwinds from the weak European economy,” says Kurt Bock, Cefic’s president and chairman of BASF, Europe’s and the world’s largest chemical company. “The chemical industry (also) continues to be exposed to strong international competition.” In the first five months of 2013 EU chemicals production went down by 2.1 per cent compared with the same period in the previous year, according to Cefic. However there were signs of a pick-up. In May the monthly output grew by 2.7 per cent compared to April. Confidence among EU chemical companies significantly improved in June, according to Cefic. The association is expecting that a rise in demand in the second half of the year will continue into 2014 with a strengthening of

industrial production in Europe after two years of weakness. As a result it is expecting growth in production of 1.5 per cent next year. Among the main chemicals segments in Europe, fine and speciality chemicals are expected to expand by 2 per cent in volume terms and consumer chemicals by 1.5 per cent. Petrochemicals production will go up by 2 per cent and inorganic basic chemicals by 1 per cent.

High margin opportunities The industry will be looking to the chemicals segments with higher added values to achieve stronger growth rates than over the last few years. Currently – and in the medium and long term – Europe does not have the low production costs and plentiful supplies of relatively inexpensive energy to give it major competitive advantages in the production of commodity chemicals on a world scale.


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Articles inside

Water treatment solutions Ovivo

7min
pages 166-172

Superior sanitary solutions Kolektor Liv

5min
pages 162-165

Winning formula RAY

5min
pages 158-161

On your bike Giant

6min
pages 153-157

Making connections GN Netcom

4min
pages 150-152

Commercial composite strength Amber Composites

5min
pages 146-149

Mighty light MWS Industry Holding

4min
pages 140-142

Masters of sheet metal machinery Petersen Machinery

6min
pages 137-139

Cutting-edge sand-casting solutions Thoni-Alutec

4min
pages 120-123

Strength in a group COLOREX Group

10min
pages 124-128

Innovators in high grade steel Nedstaal

4min
pages 116-119

A pioneer in coatings Oerlikon Balzers

5min
pages 132-136

Health and wellbeing straight from the Tuscan hills

5min
pages 143-145

Specialists in hydraulic valve blocks

4min
pages 129-131

Rooted in the past, focused on the future

5min
pages 108-111

From strength to strength Laxcon Steels

5min
pages 112-115

Lathes of the highest quality FAT

7min
pages 104-107

Steel forgings for global markets ACSA Steel Forgings

4min
pages 96-99

Global expansion Bodycote

4min
pages 100-103

Maximum comfort, minimum energy

5min
pages 92-95

Complete heating solutions Galmet

5min
pages 89-91

Leader in special-purpose truck bodies IGLOOCAR

5min
pages 86-88

First on the grid Woodward Kempen

6min
pages 78-81

Flavour of success Pågen

4min
pages 82-85

Energy from biomass Schnell Motoren

4min
pages 75-77

Energy storage solutions Power-One

8min
pages 70-74

Harnessing the future PKC Group

5min
pages 66-69

Flying high Buhler Motor

4min
pages 61-65

Tailored to perfection Strellson

4min
pages 58-60

A global giant Proctor & Gamble

5min
pages 54-57

A global leader in cement Cimsa Cimento

6min
pages 46-49

World class construction machinery Hidromek

5min
pages 43-45

The green team Nopa Nordic

4min
pages 50-53

Proving its metal Ljunghäll Group

4min
pages 38-42

Taking care of your vehicle Ravaglioli

6min
pages 34-37

Turbocharged success BorgWarner Group

4min
pages 30-33

Serving the international auto industry AD Plastik

5min
pages 26-29

Moving on Relocations and expansions

3min
page 20

Taking the high-margin road Europe’s chemical

9min
pages 8-10

Linking up Combining strengths

7min
pages 18-19

Technology spotlight Advances in technology

8min
pages 22-23

Bill Jamieson Waiting for the German watershed

4min
page 6

Winning business New orders and contracts

6min
pages 16-17

Flight of the starship Solar Impulse crosses the USA

5min
pages 14-15

Industry people Appointments

2min
page 21
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