EPCA ’08: Shell strong in downturn - video

28 September 2008 11:42  [Source: ICIS news]

 

MONTE CARLO (ICIS news)--Petrochemicals players need to have their cost competitiveness “in the right place” to weather the gathering economic storm, Shell executive Graham van’t Hoff said on Sunday.

 

The strength of a company’s balance sheet would also prove to be of vital importance as the industry headed into a downturn, the global head of the Anglo-Dutch major’s base chemicals segment added on the sidelines of the European Petrochemical Association (EPCA) conference.

 

“The whole economic scene is difficult to read,” Van’t Hoff said in an interview with ICIS news.

 

“We’ve certainly had a roller-coaster ride,” he added, referring to wildly fluctuating feedstock costs in 2008.

 

“We have had extreme margin volatility… but to some extent you say… ‘so what’. Shell Chemicals works with Shell Trading more to figure out clues through this puzzle,” he said, rather than directly hedge against feedstock and cost price volatility.

 

“The strength of the [Shell] balance sheet at present is an asset,” Van’t Hoff said but added some companies in the petrochemical sector might be heavily exposed.

 

Some companies were having to run very short term, he said.

 

“A lot of [petrochemical] players have highly leveraged balance sheets… our philosophy is to be highly competitive,” he said

 

Shell Chemicals is planning to invest more heavily in feedstock integration at its manufacturing and Shell group refinery sites in the US Gulf, Van’t Hoff added.

 

The investments came as part of the company’s strategy to invest in more advantaged cracker feeds globally and in closer refinery integration, he said.

 

The four-day conference ends on Tuesday.

 

To discuss issues facing the chemicals industry visit ICIS connect 

By: Nigel Davis
+44 20 8652 3214

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