InterviewUK chemicals fail to self-promote for survival

23 July 2009 18:55  [Source: ICIS news]

By Will Beacham

LONDON (ICIS news)--The UK chemical sector is failing to effectively promote itself to the government to ensure its long-term survival, a consultancy said on Thursday.

The nation's government needs to make a strategic decision about the importance it places on a viable domestic chemical industry, and the industry needs to be more effective in that process, said KPMG, a global consultancy.

KPMG made its comments following Dow Chemical's announcement that it is closing its ethylene oxide (EO) and ethylene glycol (EG) facility at Wilton, Teesside.

Croda has since announced that it would also cease production at the site.

“There are some big strategic questions to be thought through better [by industry] so that they can put the case to government about why it’s important to have a guaranteed supply of certain strategic chemicals," said Chris Stirling, European head of chemicals and pharmaceuticals.

"The UK has to worry about whether it wants to have a secure supply of chemicals or whether it is happy to allow its chemical industry to whither away and be dependent on imports in the future," Stirling said.

He added: “I don’t think this has been done very effectively and neither does anyone in the industry. Clearly industry is at fault for not pushing itself and not getting itself heard enough.”

Stirling said that trade unions have written to UK business secretary Peter Mandelson about the Wilton closures, “but it’s been more in hope than anything else, because the government doesn’t see this as a priority compared to what’s happening, say, with [car manufacturer] Vauxhall”.

Paul Harnick, European chemical and pharmaceutical executive, questioned the viability of the Wilton site, bearing in mind the recent closures.

“You’re looking at a third of the site’s capacity already closed or about to close - this doesn’t look great considering the operating model of the cluster," Harnick said.

He added: “We know the government has been looking at this site, and some guys like the Chemical Industries Association and the North East Process Industries Cluster have been involved and been lobbying quite hard. They’ve taken it up to the level of Peter Mandelson but there has been no government support to date.”

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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By: Will Beacham
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