Despite the impact of continued high energy and raw material costs, chemical executives who spoke at the Chemical Heritage Foundation's first annual chemical industry conference last week said they expect continued improvement in demand and prices for their products. But Engelhard CEO Barry W. Perry warned that "2004 won't be a great year" for the chemical industry. "Improving volumes in the chemical industry are encouraging but not conclusive." Perry said that as far as he can tell, the industry is unlikely to "hit its stride" until the third quarter of this year. Many, like Rohm and Haas Chief Operating Officer J. Michael Fitzpatrick, said they continue to work on technology advances to provide a competitive edge. Cytec Industries CEO David Lilley said his firm is making use of financial hedges to reduce fluctuations in the cost of natural gas. W. Kim Foster, FMC's chief financial officer, said the business climate continues to improve, adding that, to lower costs and capital investments, his firm is outsourcing herbicide and insecticide production to China, Mexico, and India.