28 February 2013 13:11 [Source: ICIS news]
LEVERKUSEN, Germany (ICIS)--Growing global demand is likely to ease the overcapacity that has plagued the chemicals industry during the last few years, Bayer CEO Marijn Dekkers said on Thursday.
Speaking at a press conference at the company’s Leverkusen headquarters in Germany, Dekkers predicted that strong demand growth, particularly from Asia, will help to drive global capacity utilisation back to around 90% within the next four years.
He said: “If you look back, 2006 and 2007 were very strong years, and a lot of people built extra capacity, particularly in Asia. Demand then suffered as a result of the [financial] crisis, but the capacity was being built and concluded, and in the last five years or so we have basically had a situation with overcapacity in a difficult economic situation.
“This overcapacity is gradually being filled now, and will reach more of a normal capacity utilisation, over 90% over the next few years, which will also help significantly with [Bayer] MaterialScience,” he added.
Dekkers said overcapacity was one of the factors behind a fall in earnings for its polycarbonates (PC) business, with new global production capacities creating downward pressure on prices at a time of higher-than-expected energy and raw materials prices.
He predicted that rising global demand driven by Asia is likely to improve capacity utilisation and profitability for the division.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections