Good year for basic chemicals

Chemicals production in Europe has climbed by about 4 per cent over the past year, according to the European Chemical Industry Council (CEFIC). The best performers were the basic industrial chemicals; pharmaceuticals, for all their profit-garnering power, came off worst. A further increase is likely during 1998, it adds.

'It is now beyond doubt that 1997 will prove to be a good year for chemicals production in Europe,' claims CEFIC in its latest economic bulletin, 'and it seems likely that 1998 will be very nearly as good.'

Excluding pharmaceuticals whose volumes declined because of Europe-wide healthcare budget cuts production growth increased by 5 per cent in 1997, and should grow by around 4 per cent this year, the council predicts.

However, the picture differs widely across Europe. In the UK, high interest rates and the strong pound meant that there was no growth in chemicals production. Over the Channel, however, France, the Benelux countries and Germany all showed strong improvement.

The growth is being fuelled by a lack of inventories, says CEFIC; stockbuilding is therefore an important demand driver. But export demand outside Europe is also growing steadily, with the US, Central and Eastern Europe, and Southeast Asia and Latin America all clamouring for materials. 'Extra-European exports of chemicals currently account for as much as 22 per cent of EU chemicals sales, as compared with 18 per cent in 1990,' CEFIC comments.