NEW YORK (ICIS)--The outlook for the global chemicals industry is positive despite supply chain challenges which will eventually dissipate, the CEO of BASF said.
“First it’s good news for the chemical industry all over the world. Wherever you are, you had a good first half of the year. On the outlook… I would say all over the world and in all the segments, we have still a very positive environment going forward,” said Martin Brudermuller, CEO of BASF, at a fireside chat during the ICIS Power Players Awards virtual event.
Brudermuller is the winner of the 2021 ICIS CEO of the Year Award, having been selected by his peers among the ICIS Top 40 Power Players.
“Q3 might be challenged a little bit from the automotive industry side. We have these semiconductor shortages limiting production but beyond that, I would say we’ll have a strong run for the rest of the year. I think as far as you can look…  looks reasonably well, so I think we have a good time ahead of us,” he added.
“While supply chain challenges from raw materials to transportation will not go away overnight… over time I think the system will adjust to this and we will see a little bit of a release on that side,” the CEO said.
The unprecedented speed of the global economic snapback from the depths of the pandemic lockdowns in 2020 shocked supply chains across the board. Amid the huge uncertainty on the impact of the virus in the absence of a vaccine with some predictions of a global depression, companies dramatically drove down inventories.
“I think the whole world was a little bit overwhelmed by how fast the recovery was… So with the positive outlook, people have refilled their inventories and at the same moment raised their production. And with this, we basically have shortages in most of the services and deliveries and materials,” said Brudermuller.
The challenges caused by COVID-19 will not change BASF’s overall investment strategy as it takes a very long-term view in its decisions with assets expected to run for several decades, he maintained.
“BASF always had the strategy that as much as we can, we invest where the market is, close to our customers. And I think that has proven right in the past, it has proven even more to be right in [Covid] times, and I think it is also the right strategy post-Covid,” said Brudermuller.
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Interview article by Joseph Chang