Advertisement

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Business

S&P Sees European Growth Slowing In 2009

Slowdown could worsen if financial market turmoil spreads to broader economy

by William J. Storck
September 27, 2007

Standard & Poor's, the credit rating service, sees conditions for European chemical companies remaining good until 2009. There is now a risk, however, according to an S&P analysis, that demand could be hit and the industry outlook could be less promising if current financial market turmoil spreads to the broader economy.

Even without such a hit, S&P expects a downturn in the petrochemical cycle in 2009 as a result of overcapacity, assuming that demand grows at an annual rate of 3.5%. The report says weakening demand would affect all chemical companies, including specialty chemical and industrial gas producers, although these two sectors would suffer less severely than others.

Companies with lower credit ratings are more vulnerable to supply-and-demand changes, and they face the greatest risk in the coming quarters.

S&P also expects a slowdown in merger and acquisition activity following high activity in the past two years due to low interest rates and active participation by financial sponsors. Nevertheless, the report says, merger and acquisition activity is expected to continue at a moderate rate as chemical companies optimize and diversify product portfolios and target market share gains.

Article:

This article has been sent to the following recipient:

0 /1 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.