London – European polymer and chemicals companies must modernise their production facilities if they are to stay competitive and meet growing demand in the market, believes Tom Crotty, Ineos director and president of the UK Chemical Industries Association (CIA).
Crotty: Ageing assets a threat to EU chemical makers
“There is an investment need within the European industry because we have got lots of old kit that needs to be replaced,” Crotty said at a recent press briefing organised by the CIA in London.
“If you look at the stock of assets that we have in Europe, it is probably now the oldest stock in the world,” he said. “That is the time-bomb issue I worry about most.”
The petrochemicals boss also noted shortfalls in companies’ ability to supply certain products such as ethylene and propylene. More capacity is needed in Europe because fundamental growth is still there, he said.
But which players have the confidence to build a new cracker?
“I don’t see it,” said the Ineos director. “Not when you can build that cracker in America with its cheap shale gas and import the finished product, why would you build a cracker in Europe?
Some companies, though, might still expand their crackers in Europe, as these investments are lower risk. Indeed, Crotty indicated that Ineos was considering such projects.
“There is a propylene shortage in Europe and you could build a unit for €400-500 million. That would just about pass the threshold. We are looking,” he said.
Read full article in the July/August issue of European Rubber Journal