InterviewSmall Europe firms face Reach struggle

06 September 2007 12:35  [Source: ICIS news]

By Mark Watts

 

LONDON (ICIS news)--Smaller producers in Europe could disappear as they struggle to pay the costs of registering products for the Reach initiative, the CEO of Belgian chemicals company Tessenderlo said on Thursday.

 

Frank Coenen said smaller companies would need help from national and regional chemical federations, but may need to hire outside consultants which would drive up costs significantly.

 

“Companies with heavily formulated portfolios like paints and inks could be in big trouble,” said Coenen in and interview with ICIS news.

 

“I would not exclude seeing smaller companies disappear and expect to see more consolidation in the industry to deal with the costs,” he added.

 

Reach - the acronym for the registration, evaluation and authorisation of chemicals – was approved in 2006, replacing as many as 40 separate pieces of legislation covering the sale and use of chemicals. It came into effect in June this year.

 

Energy giant BP has estimated a cost of $60,000 (€44,000) per product, whether made in Europe or sold on the European market, while reports have estimated that Reach costs could be as high at 20% of some producers’ annual turnover.

 

Coenen said small companies don’t have the resources of larger companies, such as toxicologists and regulatory experts, while it would be hard to judge whether outside advice would be good.

 

“Typically, managers will get the workload on top of their normal jobs,” he added.

 

However, Coenen saw no big disadvantages for “medium” companies with excess of €1bn sales.

 

Belgian polyvinyl chloride (PVC) producer Tessenderlo reported sales of €2.2bn in 2006 and booked strong second quarter growth this year.

 

Read the full interview with Frank Coenen in the 24 September issue of ICIS Chemical Business magazine.

 

($1 = €0.73)

By: Mark Watts
+44 20 8652 3214

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