Commentary: It's time to learn to live with volatility

12 October 2012 09:35  [Source: ICB]

Europe's chemical industry has grown used to being battered by seemingly unpredictable swings in feedstock pricing and supply dynamics against a backdrop of poor downstream demand.

So it is interesting to hear how a market player with major petrochemical assets in Europe is dealing with what has become the new reality for businesses operating across the region.

Executives from SABIC spoke to ICIS last week about their strategies, which fall roughly into three areas: working capital management, efficient use of production assets, and optimising product portfolios.

Dieter Hollmann, SABIC business director for polypropylene (PP) in Europe, said: "People are looking at optimising stocks. It's a very important element for the whole value chain. Working capital management will be very high on the agenda."

He added that production sites will need to be operated flexibly, especially high-cost assets. Global companies are also focusing on higher performing regions such as emerging markets and reshaping their product portfolios to engage with customers. SABIC is fortunate to have a major operating base in the low-cost Middle East, a luxury many other European operators do not enjoy.

See next week's issue for the full interview.


By: Will Beacham
+44 20 8652 3214



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