07 October 2013 18:35 [Source: ICIS news]
BERLIN (ICIS)--Change in the petrochemical industry is currently coming from the supply side and not demand, an executive from Dow Chemical said on Monday.
“If I think about the events that are shaping our ability to supply or the demand we’re trying to meet, it’s much more on the supply side – people rationalising a facility, people adding capacity in North America because of the economics,” said Patrick Gottschalk, Dow’s business president for its Monomers, Resins and Intermediates division.
He made his comments on the sidelines of the 47th annual European Petrochemical Association (EPCA) conference.
With growth globally below levels where demand pushes companies to make decisions, producers instead are maximising their cost advantages where they can and minimising the pain in regions where the economy is lagging, Gottschalk said.
“Those are things that driving change,” he said. “It’s not, ‘Wow, how are we going to meet 12% demand growth in China?’ Those are not the problems we’re dealing with – those were the problems we were dealing with five years ago.”
Those companies that are well integrated have an advantage in today’s current supply-driven situation, Gottschalk said.
“One of the benefits that we have is being that we’re well integrated along the chain – we control a lot of our own destiny in that,” he said. “So we’re able link our decisions more efficiently than chains that are less connected.”
The EPCA conference runs 5-9 October.
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