Demand to ease chems industry overcapacity woes – Bayer

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.

By: Tom Brown
+44 208 652 3214

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