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Investment

European firms add local production capacity

Sector is enjoying sustained growth thanks to a hike in exports

by Alex Scott
September 27, 2018 | APPEARED IN VOLUME 96, ISSUE 39

 

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Credit: Shutterstock
The German chemical industry continues to be buoyed by growth in exports.

Several European chemical firms are expanding their manufacturing footprints in the heart of the region. The investments are taking place despite growing competition from Asia, the Middle East, and the U.S., as well as uncertainty about Europe’s economic outlook in the face of challenges such as the U.K.’s impending exit from the European Union.

Inovyn, a subsidiary of Ineos, says it plans to increase polyvinyl chloride capacity in Jemeppe, Belgium, by 200,000 metric tons per year in 2020. “The investment strategy for our polyvinyl chloride businesses—in which Jemeppe will play a vital role—will help to accelerate Inovyn’s global growth whilst reinforcing our leading market positions in Europe,” Inovyn CEO Chris Tane says.

Lanxess says it will spend tens of millions of dollars to build an engineering plastics compounding facility in Krefeld-Uerdingen, Germany. The plant is set to open in the second half of 2019.

Meanwhile, Solvay is in the process of starting up a plant in Wrexham, Wales, that makes adhesives and films for the aerospace industry. The firm says it built the plant in response to growing global demand.

Indeed, a hike in exports is a key trend across the European chemical industry, according to the European Chemical Industry Council (Cefic), a trade association. In the first half of the year, chemical exports jumped 2.6% to about $80 billion compared with the same period a year ago, Cefic Chief Economist Moncef Hadhri says. Overall European output grew 0.9% in the first half, but in some specialty chemical sectors, such as cosmetic materials, growth is almost 5%, Hadhri says.

Chemical revenues in Germany, the region’s largest producer, are set to increase by 3.5% in 2018 to $240 billion, according to VCI, the German chemical industry association. VCI says the demand increase is coming mainly from foreign markets.

Europe’s growth, though, is uneven. Within days of announcing a new silicones and silyl modified polymers plant in Germany, Evonik unveiled plans to merge its personal care and household care divisions, resulting in the closure of sites in Milton Keynes, England, and Granollers, Spain.

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