APIC ’07: Industry faces uncertain future

18 May 2007 07:53  [Source: ICIS news]

TAIPEI (ICIS news)--The Asian petrochemical industry faces a number of challenges that threaten its future and countries in the region need to co-operate if they are to stay competitive, said the Petrochemical Industry Association of Taiwan’s president Sidney Chow on Friday.


The threat from Middle East expansion, global warming, the EU’s REACH environmental legislation and volatile oil prices were the major hurdles facing the industry in the region, he added at the Asia Petrochemical Industry Conference (APIC) in Taipei.


“Any of these issues has the potential to change the way we conduct our business,” said Chow.


Speeches from the chairmen of other Asian petrochemical associations echoed these views as they addressed delegates at the conference.


Most speakers agreed that the formation of free trade agreements and co-operation between Asian countries was essential if the region was to remain competitive as countries would not be able to combat current threats to the chemical industry alone.


The view that delays in ramping up capacity in the Middle East had bought the region extra time in finding ways to combat the next downturn was also prominent.


Distribution channels between countries should be developed, said Japan’s Petrochemical Industry Association chairman Hiromasa Yonekura. Japan was willing to share its energy saving and anti-pollution technologies with other countries, he added.


Earnings in the petrochemicals industry had already started to deteriorate as the high oil price had prompted a slowdown in domestic demand, said Korean delegate Hur Won-joon. Asia would be the hardest hit as new Middle East capacity came onstream, he added.


Meanwhile, there was a strong sense of concern about the “security and supply of oil”, said YM Dato Tengku Mahamut, president of the Malaysian Petrochemical Association. He added that this was also affecting the supply of naphtha, which feeds 70% of Asian crackers.


Aggressive free trade negotiations were taking place to improve market access, he said.


The regional industry would have to brace itself for intense competition in this “new ball game”, said Thai association chairman Supachai Watanangura. Solidarity would be the key to success, he added.


Managing costs would remain a continuous challenge for the Asian petrochemicals industry, said A Chockalingam of the Singapore Chemical Industry Council. The boom in Chinese growth and the increase in Middle East capacity would create a new equilibrium, however, which would offer opportunities for everyone who was prepared to grab them, he added.


The high price of feedstocks and lower demand would place pressure on manufacturers, said KG Ramanathan, chairman of the Chemicals and Petrochemicals Manufacturers Association (CPMA) of India who finished the round of speeches.


To hear Ramanathan’s speech, tune into ICIS radio at www.icis.com/tv

By: Jane Gibson
+44 20 8652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly