Spain needs improved legal framework to remain competitive - Cepsa

20 June 2012 17:13  [Source: ICIS news]

MADRID (ICIS)--Spain needs to promote a fair and efficient legal framework for its chemical industry to remain globally competitive, Spain-based energy group Cepsa Quimica SA said on Wednesday.

Speaking at the 7th ICIS World Phenol-Acetone Conference in Madrid, Spain, Cepsa CEO Fernando Iturrieta said energy costs need to be reduced, transport efficiency needs to be improved, and productivity needs to increase, in order for Spain to remain competitive.

“The chemical industry in Spain is the only one that seems to be growing but others are declining,” Iturrieta said.

He added that from 2007-2010, the majority of industrial sectors in Spain decreased in sales revenues – some by nearly 50% ­- while the chemical industry grew by 6.9%, despite economic instability.

“Even though we [the chemical industry] are performing better than other sectors, we are still suffering because of the crisis,” Iturrieta said.

He said that confidence in EU industry has largely fallen since 2008, with consumer and construction confidence dipping most significantly.

“The feeling of the consumer has been negative since 2002,” he added.

Iturrieta said the situation in Europe is better than Spain, but it is still not very positive. EU industrial confidence has decreased mainly because of lower-than-expected order-book levels, he added.

Iturrieta said that smart regulation was required in order to improve competitiveness, adding that there are many regulations generated without the mandatory impact evaluation, which restricts the industrial activity in Europe.

Iturrieta spoke of the trends in chemical production in Europe and said that capacity utilisation in the European chemical industry decreased in the second quarter of 2012, and is still below its long-term average.

“In Spain, there is a complex administrative and legal framework, a lack of administrative and regulatory coordination between regions,” he said.

“This has resulted in legal insecurity, the break up of the single market and many administrative charges,” he added.

Iturrieta said a high tax burden is another negative factor for competitiveness, as corporation tax in Spain is higher than the EU average, adding that Spain imports almost 80% of its energy against the EU average of 50%.

“This dependence on the fluctuations of oil and gas prices adds exposure towards producing countries,” Iturrieta added.

He said there needs to be more focus on improvement in infrastructures and transportation. “We need to have the right system of transportation. And we don’t have it,” he added.

Iturrieta said: “Spain has a good, active, dynamic industry, but we have many problems. Unless we see a general improvement, we will have a loss of skilled workers in Spain, and the loss of jobs may never be regained. That is a major worry.”

CEPSA has the capacity to produce 600,000 tonnes/year of phenol and 370,000 tonnes/year of acetone.

The company has activities in the energy sector covering the whole chain from exploration and production of hydrocarbons, natural gas and electricity to oil refining and marketing of derivatives and petrochemicals.

The 7th ICIS World Phenol-Acetone Conference runs from 19-20 June.

By: Helena Strathearn
+44 208 652 3214

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