|By Business Wire||
|May 13, 2014 02:00 AM EDT||
With Germany taking a slight lead, Europe’s chemical industry is slowly exiting the global economic recession. However, despite expected marginal growth, concerns are mounting for industry leaders, who face increasing competition, feedstock cost disadvantages, a difficult business climate and aging infrastructure.
The outlook for the German and European chemical sectors will be among the key topics to be discussed on day two of the IHS Berlin Forum, hosted May 12-14, by IHS Inc. (NYSE: IHS), the leading global source of critical information and insight.
German chemical industry executives are concerned about the potential loss of business to more competitive regions, but, in general, they still have a slightly more optimistic outlook than the rest of European chemical operators, according to John Page, vice president of consulting at IHS Chemical. “This optimism is largely because the German economy is one of the strongest economies in the region,” he said. “Germany has a much larger and more robust manufacturing base than the rest of Europe, and their facilities are more up-to-date from a technology standpoint, than the rest of Europe. Most companies expect the German chemical business to pick up in the coming months, in part due to increasing domestic demand.
“IHS Chemical forecasts an overall increase in German chemical production of 2 percent for 2014, so we are talking about sluggish growth here, but it is growth,” Page said. “German chemical prices are likely to drop slightly, by about 0.5 percent, but we expect chemical sales to rise to €191 billion in 2014. Despite an expected increase in domestic demand for chemicals, however, very little is going to change in the foreseeable future regarding the German chemical exports.”
Germany, Page said, has historically exported capital goods around the world. To date, with strong demand for these goods in China and elsewhere, the German economy has held up based on these exports. However, going forward, the export outlook for Germany is not as strong. German exports to countries in Europe such as Greece, Italy, Spain, Portugal and Ireland have declined due to these countries’ anemic economies.
While the European chemical industry continues to recover from a long and painful recession, it is doing so at a modest pace, and unlike German producers, not all other European chemical producers can expect much uptick in domestic demand to brighten their outlook, said IHS.
The European production of chemicals is likely to see a 1.5 percent increase in 2014 with a modest rise in exports. However, the industry still faces a bit of a competitive headwind as it endures higher costs than other, more competitive regions such as North America or the Mideast. These regions are leveraging the advantages of lower feedstock costs made possible by the region’s shale gas boom. Additionally, European chemical producers are increasingly facing a more stringent regulatory and tax environment. At the same time, the industry is saddled with an aging infrastructure that is quickly falling behind the technological curve and the advancements being adopted by other global competitors.
“Over time, the European chemical industry has seen a gradual change in its fortunes, with growing costs and a competitive market with many players,” said Michael Smith, vice president at IHS Chemical. “Faced with uncompetitive energy prices and stagnating demand, European chemical companies must adapt quickly or suffer the consequences,” he said. “They will face continued tough competition from Middle Eastern, Chinese and, increasingly, US producers benefiting from cheap energy and feedstocks.
“With an increased import pressure from the United States for vinyls and caustic soda, for example, some players will choose to exit the market in the mid-term,” Smith added. “Additionally, we expect the closure of some steam crackers in Europe as well as further merger and acquisition activity during the next five years as the industry readjusts to the less favorable market dynamics for much of its chemical products. This could bring some major change to the industry in Europe, but also globally in terms of joint ventures, such as the approved joint venture of the European chlor-vinyls businesses of INEOS and Solvay, which will improve the healthy competitiveness of the combined operations in Europe, but also place a major global player in the European market,” Smith said. “It is good to see that the European Commission’s proposed commitments are aimed at avoiding higher prices, which would negatively affect businesses and customers in Europe.”
Despite the regional challenges, some companies are making new investments that show signs of positive growth in the European and German chemical sectors. IHS ChemicalWeek reported 6 May 2014, that Dutch specialty chemical company AkzoNobel, held its official inauguration for a membrane-process chlorine plant at the Höchst industrial park near Frankfurt. The project involved an investment of €140 million and included conversion of a mercury-cell chlor-alkali facility and a capacity expansion of 50 percent — to 250,000 metric tons per year of chlorine and 275,000 metric tons per year of caustic soda. At a briefing for journalists before the ceremony, Ton Büchner, CEO, and Werner Fuhrmann, board member/specialty chemicals, put the investment into context and spoke about the company’s strategy. Büchner said that AkzoNobel is on course to meet its previously announced 2015 targets, which include a 9 percent return on sales and a 14 percent return on capital employed, to be achieved through restructuring, cost reduction and organic growth.
According to IHS Chemical forecasts, West European demand for chlorine will decline slightly. West European chlorine demand is expected to decrease to around 8.56 million metric tons (MTT) 2018 from 8.7 MTT in 2013, IHS Chemical said. Since not all of the producers will convert their production units from mercury to membrane technology, West European chlorine capacity will also decline, from 11 MTT in 2013 to 9.7 MTT in 2018. Chlorine is well known for its uses as a bleaching agent and disinfectant, but it is also essential in the manufacture of other chemicals, including polyvinyl chloride and for other plastics’ production.
On a global basis, however, chlorine demand is forecast to grow from 64.5 MTT in 2013 to 74.3 MTT by 2018, with Northeast Asia being of course the most dynamically growing region, IHS Chemical said.
In the case of caustic soda, between one and two million metric tons of production capacity in Europe could be lost by 2018, and the European vinyls business also is expected to undergo major changes, IHS Chemical said. The price of ethylene is expected to fall given weak downstream markets and decreasing oil prices, while ethylene demand in Europe is not expected to improve much in 2014. The situation is similar for propylene, noted IHS Chemical.
About IHS Forum
The IHS Berlin Forum is a gathering, hosted by IHS, that brings together executives from related industries, finance, government, and academia to gain insights, share expertise, and learn from IHS experts and industry thought leaders. The IHS Forum will examine key topics around a central theme—“Europe’s Global Competitiveness: Opportunities and Pathways,” with a particular focus on European economies, monetary policy, stabilizing labor markets and the European energy scene. The IHS Forum is part of an ongoing series of events to bring together leading insights and analysis to explore relevant issues with depth and breadth, making crucial connections across sectors.
Attendance & Registration
The IHS Forum, Berlin 2014 is being held at the InterContinental Hotel Berlin from 12-14 May. Further information and delegate registration is available at http://ihsglobalevents.com/forum/berlin2014/.
Members of the press can register for a complimentary pass to the IHS Forum in Berlin by sending an email with name, title and outlet details to [email protected].
A full agenda and additional information can be found here: http://ihsglobalevents.com/forum/berlin2014/agenda/
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs more than 8,000 people in 31 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2014 IHS Inc. All rights reserved.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Sep. 28, 2016 09:45 AM EDT Reads: 5,088
Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
Sep. 28, 2016 09:15 AM EDT Reads: 1,052
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Sep. 28, 2016 09:15 AM EDT Reads: 3,155
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Sep. 28, 2016 09:00 AM EDT Reads: 2,634
DevOps and microservices are permeating software engineering teams broadly, whether these teams are in pure software shops but happen to run a business, such Uber and Airbnb, or in companies that rely heavily on software to run more traditional business, such as financial firms or high-end manufacturers. Microservices and DevOps have created software development and therefore business speed and agility benefits, but they have also created problems; specifically, they have created software sec...
Sep. 28, 2016 09:00 AM EDT Reads: 1,268
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, showed how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningful f...
Sep. 28, 2016 09:00 AM EDT Reads: 2,747
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Sep. 28, 2016 09:00 AM EDT Reads: 3,841
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Sep. 28, 2016 08:45 AM EDT Reads: 1,201
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
Sep. 28, 2016 08:45 AM EDT Reads: 1,124
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
Sep. 28, 2016 08:45 AM EDT Reads: 2,546
In his session at @ThingsExpo, Kausik Sridharabalan, founder and CTO of Pulzze Systems, Inc., will focus on key challenges in building an Internet of Things solution infrastructure. He will shed light on efficient ways of defining interactions within IoT solutions, leading to cost and time reduction. He will also introduce ways to handle data and how one can develop IoT solutions that are lean, flexible and configurable, thus making IoT infrastructure agile and scalable.
Sep. 28, 2016 08:30 AM EDT Reads: 1,571
Technology vendors and analysts are eager to paint a rosy picture of how wonderful IoT is and why your deployment will be great with the use of their products and services. While it is easy to showcase successful IoT solutions, identifying IoT systems that missed the mark or failed can often provide more in the way of key lessons learned. In his session at @ThingsExpo, Peter Vanderminden, Principal Industry Analyst for IoT & Digital Supply Chain to Flatiron Strategies, will focus on how IoT de...
Sep. 28, 2016 08:30 AM EDT Reads: 1,153
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Sep. 28, 2016 08:15 AM EDT Reads: 537
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
Sep. 28, 2016 08:00 AM EDT Reads: 2,056
"We have several customers now running private clouds. They're not as large as they should be but it's getting there. The adoption challenge has been pretty simple. Look at the world today of virtualization vs cloud," stated Nara Rajagopalan, CEO of Accelerite, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Sep. 28, 2016 08:00 AM EDT Reads: 2,430