Volume 94 Issue 41 | News of The Week
Issue Date: October 17, 2016 | Web Date: October 12, 2016

Europe’s chemical industry confronts shrinkage

Asian growth, U.S. cost advantage lead to declining sales for third year in a row
Department: Business
Keywords: economy, Europe, ethylene, shale

Europe’s chemical industry is confronting the hard truth that it is shrinking—both in absolute terms and as a share of the global chemical market.

Cefic, Europe’s main trade association for chemical companies, released its latest economic report at its annual meeting, held in Florence, Italy, earlier this month, and the top-line figures are stark.

European Union chemical sales registered their third consecutive year of decline in 2015, falling more than 3% to about $575 billion. Even more startling, Europe’s share of global chemical sales shrunk to 14.7% in 2015 from 17.3% in 2014.

“What we’re seeing is what we’ve predicted for many years now,” said Marco Mensink, Cefic’s director general. “Asia’s fast-growing market, coupled with the U.S. shale boom, means Europe needs to act fast to stay competitive.”

Mensink pointed to fuel, feedstock, and energy costs as Europe’s Achilles’ heel. “Making ethylene costs twice in the EU than it does in the U.S., despite low oil prices,” he said.

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Kottmann
Credit: Clariant
Photo of Clariant CEO Hariolf Kottmann.
 
Kottmann
Credit: Clariant

At the meeting, Clariant CEO Hariolf Kottmann took over as Cefic’s president from Solvay CEO Jean Pierre Clamadieu. Kottmann told attendees that his priority will be enhancing the innovative role of Europe’s chemical industry to counter the rising competitiveness of other regions.

The good news, Mensink said, is that Europe is positioned to provide solutions to global challenges by, for example, offering energy-efficient materials that combat climate change. But he cautioned that European firms need to link up research, development, and commercialization at a faster rate.

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society

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