INSIGHT: Image is everything for chemicals

29 September 2008 17:03  [Source: ICIS news]

By Nigel Davis


MONTE CARLO (ICIS news)--They are old themes but they have a new twist.


Energy and feedstock availability and cost, the sector pipeline network, the important production locations and, of course, the image of chemicals and plastics all continue to occupy the minds of those most deeply involved with petrochemicals.


Greater integration is not simply nice to have in Europe but, increasingly, essential.


How will different producers in different locations then garner the enthusiasm and the support to ensure that the sector’s ethylene and propylene pipeline network is extended?


Sector executives have to continue to lobby long and hard for a more level energy playing field. Energy protectionism in Europe is rife.


At the same time, however, the region is bordered by nations with considerable oil, and particularly, gas potential.


Players in Europe know they can benefit probably in the longer rather than the shorter term by access to feedstocks from places such as North Africa, Russia and, even, the Middle East.


If Europe can get it right, it seems as if nine upstream production locations are earmarked to benefit from the greatest attention.


Feedstock and energy access, proximity to markets and pipeline integration are all vitally important pieces in a jigsaw that is becoming better understood.


But a valid question is still whether the petrochemicals sector won its battle with the politicians that not too long ago considered it to be a dead duck.


“We had to fight a view that Europe did not need an upstream chemical industry,” Total Chemicals president François Cornelis said on Monday.


Yet, as he stressed, the chemical industry is highly integrated.


The link with the downstream speciality business that sometimes seems sexier, or at least more robust, is both intellectual and geographic.


It is nonsense to believe that the chemical industry will eventually simply consist of companies making speciality chemicals, he suggested.


Cornelis, who is also president of trade association Cefic, has helped oversee the contribution of industry players to the European Commission’s high-level group on chemicals.


That work finishes towards around the end of this year with a final report due to be published in February 2009.


The issues raised by the HLG place petrochemicals at the centre of the broader chemicals sector. Demonstrating the complexity of the chemicals business and the ways in which it is so highly integrated with the value chains expending from the well-head to the shopping mall has done the industry a lot of good.


The sector generally and chemicals companies individually now have to convince national governments that theirs is a business worth supporting. 


The most intractable problems for the business remain, however.


Just how can petrochemicals players, and their counterparts in polymers, convince more people of the importance of plastics? And how can they best demonstrate that plastics pollution can be effectively challenged - most efficiently with more waste incineration.


In some respects, the great plastics debate has only just begun.


The public is concerned about plastics applications. Consumers are becoming more deeply concerned about plastics waste.


The chemicals and plastics industries have twin problems here: one of (product) acceptance and one of image. One goes along with the other, but not all the time.


Plastics makers can start to occupy more of the high ground - think about the plastics needed for better sanitation, better packaging, ultimately resource reduction. But they have to get their message across.


The image of plastics has been largely turned around in Germany through the efforts of industry players, speakers at the first business session of the 42nd European Petrochemical Association meeting suggested on Monday.


A Europe-wide shift in public opinion is sought through further cooperation with the plastics trade group, Plastics Europe.

“Plastic is only 1% of total waste in Europe, but its image, far from being bad, is terrible,” Cornelis said.


“The image of plastics should be our biggest concern because we run the risk of destroying our product by negligence and bad communication,” he added.


Plastics largely represent the public face of petrochemicals. Get that image right and a great deal more falls into place for the petrochemicals maker.


To discuss issues facing the chemical industry go to ICIS connect

By: Nigel Davis
+44 20 8652 3214

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