Global chemical firms eye acquisitions to fuel growth - KPMG

06 September 2011 09:06  [Source: ICIS news]

SINGAPORE (ICIS)--Some 66% of chemical executives who took part in a survey think that their firms will get involved in a merger or acquisition as a buyer in the next two years, business adviser KMPG said on Tuesday.

KPMG conducted the survey in June this year. The survey involved 142 senior level chemical executives in the US, Europe and the Asia Pacific.

Around 70% of the chemical executives said their firms had sufficient cash on their balance sheets for acquisitions, new technology and expansion into new markets, KPMG said in a survey report published on its website.

European executives were even more optimistic, with 71% saying they will be buyers, the report said.

"With the struggling global economy, organic growth is a challenge and input prices [feedstock costs] continue to impact production costs," said Mike Shannon, global and US leader of KPMG's chemicals and performance technologies practice.

"All of these factors set the stage for expansion growth in emerging markets, M&A [mergers & acquisitions] and innovative product strategies as companies look to gain an edge," Shannon added.

The survey also showed that these firms will focus their investments in India, the US and China, KPMG said.

Chemical executives from the US favour domestic investment, while European executives favour China, it said.

The top investment region for executives in the Asia-Pacific is India, the KPMG survey showed.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: Nurluqman Suratman

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