Cefic boss maps recovery route for EU chemicals sector

Brussels – Cefic president Giorgio Squinzi has warned that while 2010 was a strong year for the European chemicals industry, it will still take some more time for the sector to get back to pre-crisis levels.

“For several industry areas, trade competitiveness versus other countries is eroding fast and structural change is accelerating, too,” said Squinzi.

From 2007 to 2009, largely due to the economic crisis, the European chemical industry lost ground against emerging countries, which in turn continued to grow, he noted.

The value of world chemicals sales increased by 60% between 1999 and 2009. In 1999, the share of EU 27 was as high as 32.1%, whereas China stood at 5.8%. In 2009, the share of EU 27 was down to 24%, while China jumped to 22.2%.

A strength of the European chemical industry is its integration with research and innovation networks and clusters, including the related value chain, according to the Cefic president.

“Concerning innovation, we note encouraging developments both in the chemical industry and with the national authorities,” he said. “Clusters are an untapped strength for Europe that could be pushed further.

“The European Commission should promote the establishment of clusters throughout Europe on the basis of what the European Chemical Regions Network (ECRN) has laid out so far.”

Squinzi cited how the Italian government had provided Euro120 million in funds for companies to find new ways to replace dangerous chemicals.“I believe this is a best practice that should be proposed to the rest of the EU Member States, he said.

The Cefic boss went on to describe the Commission’s recent “Innovation Union” communication as a good start. There must be a sense of urgency by all parties - especially industry and policymakers - to rapidly implement the European Innovation Partnerships (EIP) described in this document, he said.

“We see an urgent need to have a seat at the table with the Water-Efficiency EIP, the Raw Materials EIP, and the Smart Cities EIP … We believe our sector has a unique position AND a natural fit for a leadership role that frames the partnerships,” said Squinzi.

However, EU member states and the EC should do more in areas such as energy and climate policy, raw materials, logistics & infrastructure and above all smarter regulation, said Squinzi – welcoming a proposed competitiveness check for new legislative initiatives and fitness tests for existing legislation.

Perhaps one potential legislative priority for Cefic and the Commission could be to find common regulatory principles among the US, China and other non-EU countries, the industry leader suggested.For example, he said REACH is the most demanding chemicals legislation out there, and other countries are looking to Europe as a model for how this type of regulation can work.

In conclusion, Squinzi said: “It’s clear that enough plans and reports are on the table. What counts now is effective implementation with tangible deliverables. We need a scoreboard that shows, first, where we stand in terms of what has already been implemented and, second, what still needs to be done if we are to catch up with our main competitors.

“This can only be achieved if we all work together. We need to regularly review where we stand and what our competitors are doing to promote the competitiveness of their own chemical industry. The raw materials strategy that countries like China and Russia are pursuing is a case in point.

“I remain confident that there is a future for Europe as a chemicals production platform, provided we take the right actions quickly.”