27 January 2009 00:03 [Source: ICIS news]
SAN FRANCISCO (ICIS news)--When more than 4,000 representatives of the fine and specialty chemical sectors meet this week in San Francisco for the Informex USA trade show, the main topic of discussion will be the uncertain outlook for 2009.
Industry sentiment was somewhat brighter last January, when Informex was held in ?xml:namespace>
Even then, however, SOCMA president Joe Acker expressed concern that a recession might be on the horizon, saying, “I wonder if we did the survey a week ago if we’d get the same results.”
The trade association will release its latest survey of members at the trade show later this week, but it is already clear that the mood has changed.
As they mix and mingle, attendees will be looking for some sense of how demand will develop in the year ahead, according to Georg Weichselbaumer, managing director of WeylChem, a German contract manufacturer with sites in Griesheim, Germany, and Elgin, South Carolina.
“Customers who have built up inventory are now reducing that inventory,” Weichselbaumer said, “so that the underlying demand may not be visible, certainly not to us, and maybe not even to our customers.”
Weichselbaumer said he also wanted to get a better idea of cash availability and cash flow among both customers and competitors.
“Managing cash is one of the biggest tasks in front of us for the year,” he remarked.
Demand from the agrochemical industry remains high, although an extended recession could hurt high-end products, said Weichselbaumer. Demand from the pharmaceutical sector remains unaffected by the slowdown. Other markets have been more difficult, however. For example, customers who sell into the automotive industry have seen demand fall up to 30%.
John Wetzel, WeylChem’s director, marketing and sales, NAFTA and vice chairman of SOCMA’s Informex Committee, suggested that there might be opportunities associated with the difficult conditions.
“This is a really tight credit environment, and I think there’s going to be more consolidation” said Wetzel. “Certainly some companies are going to go out of business. They will leave some business on the table, and someone’s going to have to do that.”
He also noted that customers who put off planned capital investments might also be more likely to outsource.
Wetzel said the case for attending Informex was stronger than ever, given the need to cut costs.
“It continues to be a meeting show,” he pointed out. “It’s probably a cost saver because instead of visiting a number of customers separately, you can do it all in one place. The other advantage is that you’re among many people, including your competitors, so there’s a huge networking opportunity.”
Attendees will also have the opportunity to attend a Biotech Breakfast Briefing on Wednesday and a Green Chemistry Breakfast Briefing on Thursday.
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