APIC ’07: “Chemical producers face huge challenge”

17 May 2007 09:09  [Source: ICIS news]

TAIPEI (ICIS news)--Established chemicals and plastics producers in Europe and the Americas face a massive challenge from the developing world as global capacities are shifting to China and the Middle East, a chemicals consultant said on Thursday.

 

“It may be the best of times for the developing world and the new Gulf producers but this changing market profile spells out the challenges the ‘old world’ [Europe and the Americas] and their customers will face,” said Gary Adam, president of consultants CMAI, addressing delegates at the 28th Asia Petrochemicals Industry Conference in Tapei.

 

By 2015, the Middle East and Asia were expected to account for 15% and 41% respectively of global basic chemicals and plastics capacity, with Europe and the Americas taking the rest, he said.

 

In 1990, the Middle East contributed only 3% to capacity, while Asia accounted for 22%.

 

CMAI research showed that by 2010 as much as 75% of petrochemicals production will go towards non-durable retail goods in countries such as China, Russia, India, and Brazil.

 

“[Chemicals producers'] product and customer mix must change in concert,” said Adams.

 

Strategies to undertake included broadening supply chains, enhancing product differentiation capabilities, improving integration and embracing a global strategy, he said.

 

The good news was the chemicals and plastics industry had shown that it was more resilient than most people thought, he said.

 

Noting that the weighted average earnings in the industry had stayed firm despite peaking oil prices, Adams said: “The industry is right where it should be despite $60 crude values.”

 

By: Jeanne Lim
+65 6780 4359

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