Chemical industry recovery continues
The year 2011 has started on a positive note for the chemical industry in the Netherlands. Statistics Netherlands (CBS) figures for the first quarter of 2011 show that output grew by almost 3% compared to the same period in 2010. Chemical companies are generally optimistic and see both opportunities and causes for concern for the remainder of the year. Many companies are considering making investments, on the assumption that the uncertainties in the market will remain manageable. Whether 2011 does indeed turn out to be a better year than 2010 also depends, according to Chairman Werner Fuhrmann of the Dutch Chemical Industry Association (VNCI), on economic and geopolitical developments elsewhere in the world.
In the first quarter of 2011, sales for the chemical industry were up 22% compared to the first quarter of last year. This increase is not only due to an increase in production but mainly reflects higher selling prices. The CBS reports that businesses in the chemical industry indicate that they intend to invest 73% more in 2011 compared to 2010 when investments had dropped from 1.4 (2009) to 0.9 billion euro. The planned investments show a mixed picture. The factors mentioned by companies include optimisation, R&D, efficiency improvement and, in part, deferred (expansion) investments.
In 2010 the chemical industry already showed signs of a strong recovery. After a serious decline in 2009, production rose by more than 7% in 2010. Turnover in 2010 rose by 25% to 47 billion euro, while selling prices rose by 20%. The recovery continued in the first quarter of 2011. Whether 2011 as a whole will be a good year, depends largely on the extent to which it proves possible to manage the consequences of a number of geopolitical and economic developments. These include the euro crisis, the after-effects of the Fukushima earthquake, inflation in China, the turmoil in the Middle East and possibly new unexpected events on the world stage. The chemical industry is primarily oriented at exports, which makes it very sensitive to such developments, currency rate movements, and fluctuating oil and raw-material prices.
For the Netherlands, the VNCI expects a positive impulse from the Cabinet’s plans in the context of its top-sector policy. Minister Verhagen (Economic Affairs, Agriculture and Innovation) has designated the chemical industry as one of the nine innovative top sectors at which the policy will be directed in the coming years. The VNCI considers innovation to be the key to keeping the industry competitive in Europe. To ensure innovation in the chemical industry, an attractive and consistent entrepreneurial climate is essential. The Dutch chemical industry, therefore, is working toward growth on a level playing field with equal opportunities and prospects.
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