UK chemical makers buoyed by industry prospects

ERJ staff report (TP)

London – The Chemical Industries Association (CIA) believes the UK chemical industry is looking good on the back of a general economic recovery and its own Chemical Growth Partnership (CGP).

Alan Eastwood, economist for CIA, outlined to ERJ at a Chemical Writers’ Dinner yesterday evening in London the organisation’s views on “The economy, energy and the chemical industry”.

“Reasons to be cheerful include a general economic recovery in the UK and the hint of a more friendly industry policy in Brussels,” Eastwood said.

He added that the CIA established the CGP in October 2013 – “which is constituted by leaders from a whole range of UK chemical businesses in order for industry leaders to make the right decisions”.

The CGP works with the UK government and is led by former CIA president Keith Wiggins. Eastwood said they are getting backing from the government – eg with the supply chain – and while this is a positive step, more work needs to be done.

Eastwood did warn that “energy costs in Europe are still high, plus the unilateral UK climate measures are costly for the broader economy even if EIIs [energy intensive industries] escape”.

There was also the issue of European regulation that “still weighs heavily” – such as the Industrial Emissions Directive (IED) and ‘Registration, Evaluation, Authorisation & restriction of Chemicals’ (REACH).

The CIA also conducted a survey of business expectations – with 55 percent anticipating ‘Volume’ to rise, 39 percent for it to remain the same, and 6 percent saying it would go down.

In terms of anticipated Margins, R&D and Capex (capital expenditure) – the survey revealed that the majority believed these would all remain at the same level.