Chemical makers optimistic toward 2008 - SOCMA

30 January 2008 21:23  [Source: ICIS news]

NEW ORLEANS (ICIS news)--Members of the Synthetic Organic Chemicals Manufacturers Association (SOCMA) had a surprisingly optimistic outlook toward market conditions in 2008, according to the results of the organisation’s annual survey released on Wednesday.

Speaking at the Informex custom chemicals manufacturers trade show, SOCMA President Joe Acker said, “The entire survey was very optimistic on the outlook of the industry.”

The survey was conducted in November and December. Roughly 35% of SOCMA’s 300 members responded to the survey. Most of SOCMA’s members are relatively small companies, Acker said.

“I wonder if we did the survey a week ago if we’d get the same results,” Acker said, noting recent news accounts that the US could be heading into a recession.

However, he added that the feedback he received from companies at this week’s Informex show indicated the industry was still optimistic towards 2008.

Companies indicated they planned to invest a mean of 8.6% of their sales revenue in research and development (R&D) in 2008, compared with 8% they had indicated for the previous year.

Acker said 52% of the companies said they had plans to make capital investments through 2008. In comparison, only 44% of those surveyed in 2006 said they planned to make capital investments through 2007.

When profit margins are under pressure, companies tend to delay capital expenditures, Acker said. Also, the US election year can cause companies to delay such investments, he said.

The continued high price of oil and natural gas, as well as competition from emerging markets, particularly China, continue to be major concerns for the industry. China continues to be perceived as the primary driver of declining sales among US companies, Acker said.

The surveyed companies said they expected 30.3% of their markets to be held by emerging market suppliers in 2008, compared with 26.3% in 2007.

The Informex show is expected to draw more than 4,000 attendees and will run through Friday.

By: Brian Ford
+1 713 525 2653

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