The European Chemical Industry:
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Dr Moncef HADHRI (Chief Economist) Cefic Industrial Policy [email protected] September 25, 2014 PowerPoint PPT Presentation

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The European Chemical Industry: Trends and Outlook ECSPP Members Meeting and European Symposium. Dr Moncef HADHRI (Chief Economist) Cefic Industrial Policy [email protected] September 25, 2014. The European chemical industry is key for economic development and wealth.

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Dr Moncef HADHRI (Chief Economist) Cefic Industrial Policy [email protected] September 25, 2014

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The European Chemical Industry:

Trends and Outlook

ECSPP Members Meeting and European Symposium

Dr Moncef HADHRI (Chief Economist)

Cefic Industrial Policy

[email protected]

September 25, 2014

The European chemical industry is key for economic development and wealth

Sales 2012: € 558 billion

  • Contributes to 18% of the

  • world’s chemical sales (2012)

  • Represents 29,000

  • companies (96% SMEs)

  • Employs 1.1 million people

  • (2013)

  • Generates € 558 billion of

  • revenues (2012)

  • Creates a trade surplus of

  • € 48.7 billion (2013)

(share %)

Source: Eurostat and Cefic Chemdata International

It is one of the largest industrial sectors in many regions of the European Union

Source: Eurostat SBS and Cefic analysis June 2014

EU chemicals is the firth leading manufacturing sector, accounting for 7% of total added value

EU industrial platform is losing importance in the EU economic activity

  • The EU ambition is to get back to 20% GDP contribution

Despite the strength of the chemical sector, current situation gives cause for concern

Output remains nearly 10% below the pre-crisis level

EU chemicals sales almost double in 20 years, while its world market share halved

  • This is a “dilution effect, a trend expected

  • to continue in the future


Source: Cefic Chemdata International

World chemicals output doubles as emerging markets sales surge

  • Growth has been fastest in emerging economies


Source: Cefic Chemdata International

And this trend will continue

Global chemicals production in value




CAGR World 3.7 % (2013-2030)

Source: IHS and cefic analysis (for 2002)

  • Growth in post-recession Europe remains low, mainly

  • due to mature markets and ageing population

What are the key factors affecting competitivenessof the EU chemicals sector?

  • Energy and Raw Materials

  • Regulatory Stability and Consistency

  • Capital Investment

  • Innovation

  • Access to Markets

  • Skills and People

  • Logistics and Infrastructure

Advantaged energy and feedstock prices are a clear enabler of competitiveness

  • This is boosting profits abroad and attracting billions

  • of dollars in investment

Ethylene cost stands for 60% of total production cost

  • Ethylene is the highest volume building block in

  • the chemical industry globally

Barriers to growth: views from CEOs of the German chemical industry

Cumulative number of EU regulation on

HSE is killing the business of chemicals

  • Number of EU regulations on HSE, 83% more in 9 years time

Investment in the EU chemicals industry has been following a worrying trend

Investment is a key factor pointing to a loss of market attractiveness for production

  • Capital intensity is both an indicator of loss of attractiveness

  • as well a driver of future competitiveness


Europe is facing a number of challenges to

its leadership on the global market

  • Geographicalshift towards the Middle East and Asia

    • Structuralovercapacities in a number of chemicalsegmentson EU markets

    • The chemical industry will continue further consolidation

    • Onlystrongchemical clusters in Europe have a future

  • Shift in business models

    • Energy efficiency and rawmaterials management requestadaptedprocesseswithin the chemicalindustry

    • Innovation and high techsolutionshold the keyfor the future

  • Demographical shift and climatechange

    • Chemical industrywill provide solutions to these challenges.

    • Butwillit happen in Europe?

Can we remain Competitive?

  • High energy and feedstock costs

  • High Regulatory Compliance Costs (egREACH)

  • Lack of a “Common Industrial Policy” or a “Common Energy Policy”

  • Non-energy raw material availability and cost issues (eg. biobased feedstock, rare earths, minerals)

  • Mature market, ageing population, risk aversion of societies

  • Large integrated domestic market with strong customer industry clusters

  • High international orientation and global networks to external customer industries

  • Skilled and motivated workers and scientists

  • Constant adaptation to globalised markets

  • Strong innovation efforts will generate new growth clusters: Efficient Energy use, health and new materials which could solve upcoming societal mega challenges

Sustainability as a strategic choice for global challenges

  • 9 billion people will live on earth by 2050!

    • How can we guarantee food and water supply for everyone?

    • What are possible benefits and contributions of plant science?

  • 67% of the world population will live in cities by 2025!

    • What does future architecture look like?

    • Which materials are needed to make energy consumption more efficient?

Health & Nutrition

Construction & Housing

Energy &Resources

Mobility &


  • 50% more primary energy needed in 2030!

    • What is the ideal energy mix of the future?

    • How big is the stake of renewable energy?

  • 1.2 billion cars will drive on earth by 2020!

    • How can we reduce emissions and fuel consumption ?

    • What will future cars be made off ?

Where will we be tomorrow?

  • “He who speaks about the future lies,

  • even when he tells the truth.”

  • (Proverb from Middle East)













Where will we be tomorrow?

2013: - 0.3%, 2014: 1.3%, 2015: 2.0%

Outlook revised slightly down compared to June 2014

  • Back-Up Slides

Providing modern products and enabling technical solutions in virtually all sectors

Base chemicals

Transfer of

Fine and specialtychemicals

intermediate goods




And an important source of direct and indirect employment

% of EU Manufacturing employment (year 2010)

Source: Eurostat SBS and Cefic analysis June 2014

Chemicals contributed to 4% of EU manufacturing employment

The de-industrialisation in Europe is more than reality

  • Less demand is generated for the EU chemicals industry

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