Chemicals feel the wind of change

Three major themes (

ICIS Jun08.pdf

) emerged from our Asian Conference last week, co-organised with ICIS:

• Change. The world is clearly changing very rapidly. Feedstock prices are rising. At the same time, major new capacity is starting to come on-stream in the Middle East, and in Asia.
• Complexity. There are many more issues to understand. Feedstock costs are being affected by geo-politics, gasoline and biofuels. Whilst economic growth is also looking much weaker.
• Challenge. Over the past decade, companies have focused on optimisation within their own chosen ‘silos’. This has been a very successful strategy, but it may not be sufficient for the future. A major theme in the blog over the past year has been that companies should develop contingency plans, in case the credit crunch became something more serious. It now looks, unfortunately, as though these plans will need to be put into action.

The last major global recession took place between 1990-4. This means that nobody under 35 has any first-hand experience of what a recession is really like. In fact, only people over 45 have actually managed businesses through such a recession.

Management teams might therefore benefit from external challenge and support, as they seek to navigate through increasingly difficult conditions.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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