EPCA ’22: Chemicals supply chains lengthening, security of supply increasingly important – Vopak CEO

BERLIN (ICIS)–Chemicals supply chains are becoming necessarily longer as consumers and producers see markets balancing between imports and local production, the CEO at tank storage operator Vopak said this week.

Dick Richelle said “security of supply is a topic of increasing importance” as in some markets consumers look for imports and there is a degree of product substitution.

Markets are balancing between imports and local production but it is too early to tell where that balance might lie, he added, speaking on the sidelines of the European Petrochemicals Association (EPCA) annual meeting.

Vopak saw the importance of its business emphasised through the COVID-19 pandemic as well as the importance of security of supply to its partners because of disruptions to supply chains globally.

There was some reduction in demand for Vopak’s services until the middle of last year as producers sought to get product to customers as soon as possible and then a slow normalising of supply chains and tank storage volumes.

Until August this year, supply chains were filling and the throughput volumes of the company’s major chemical hub locations was up between 10% and 15%. That is a reaction to partner companies’ longer term supply chain spend.

Richelle noted, however, that Vopak’s industrial segment throughput volumes were down slightly from last year as industrial activity started to decline.

Vopak has a diversified portfolio of products and is diversified globally. Resilience of the business in Asia, China and America has paid off in times of crisis, Richelle said.

When the Russia Ukraine war started, less oil flowed into Rotterdam but liquefied natural gas flows increased rapidly.

“On the oil products side, we see a massive rebalancing happening in terms of how flows are going over the globe,” said Richelle.

The EPCA annual meeting ran on 4-6 October in Berlin.

Front page picture: Vopak’s terminal Chemiehaven at the Port of Rotterdam, the Netherlands
Source: Vopak

Interview article by Nigel Davis