22 May 2007 15:40 [Source: ICIS news]
By Matt Kovac
TAIPEI (ICIS news)--The wave of commodity-based petrochemical material that is expected to flood into ?xml:namespace>
So at the annual Asia Petrochemical Industry Conference (APIC) last week, it was no surprise that many of the region’s executives were searching for answers to this potentially lethal onslaught.
What the heads of the various petrochemical associations agreed on was using the APIC as a platform to not only exchange ideas and experiences but to use it to lobby and protect them from the intense competition the industry would face from the
A new paradigm is emerging where South Korean, Taiwanese and Southeast Asian based olefin producers will find it difficult to compete on a feedstock cost basis with the Gulf.
"The entire petrochemical industry worldwide will be under severe pressure and
Effectively being muscled out of their existing and long-established markets is not something companies will take lying down.
That’s why Supachai Watanangura, chairman of the Federation of Thai Industries Petrochemical Industry Club, made a clarion call for solidarity among players in the region.
Speaking at the conference, the charismatic Supachai said APIC should move beyond an annual gathering of petrochemical players to becoming the trusted spokesman for the industry, which could formulate policy and launch opinion.
APIC could become something more akin to the National Petrochemical and Refiners Association (NPRA) of the
Apart from the threat from
“Isn’t it time for global players like us to collaborate in a more close-knitted fashion?” he said. To get the ball rolling he suggested organising an industry association chairman’s forum every six months to discuss issues and begin to find solutions.
That’s also what CEO Hur wants. Short on suggestions, he asked, delegates to share opinions on developing new markets, raise the bar on quality, reduce costs and enhance global competitiveness of Asian petchem producers.
But don’t expect a rush of associations and companies to get involved.
The geographical spread of the region, the diverse cultures and languages makes it improbable that APIC can be anything more than a meet-and-greet setting.
This might be seen to be harsh words indeed but then again APIC has been around since the seventies and hasn’t developed much.
And if companies find a way to minimise the damage that Gulf producers will exact on profitability among
On the fringes of the conference, one financial analyst said
The only answer is to find a niche or speciality chemicals within the existing product portfolio and outside of that box. No easy task considering the time and money that has to be invested in research and development.
The Japanese moved that way a long time ago and have the technology that can be offered to Gulf producers as a sweetener to get access to low cost gas feedstock.
Petrochemicals is an industry in transition, as aptly named by the conference organisers.
But as delegates began to melt away, many were still left scratching their heads as to how to overcome the impending threat from the Gulf. And APIC may struggle to come up with answers to that threat.
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