Time for a re-think

While Europe’s major power suppliers are celebrating record profits, more and more companies in the Chemical Process Industry (CPI) are struggling to cope with sky-rocketing electricity and energy prices. That a sustainable supply of competitively priced raw materials and power is crucial to the European Chemical Process Industry’s ability to compete with its rivals on the global market has long been common knowledge. The energy and electricity market has increased in value by some 80 percent since 2003 and according to Cefic (European Chemical Industry Council), the chemical industry accounts for approx. 12 percent of the European Union’s total energy requirements. Electrolysis alone, a process that is central to the production of a number of important chemicals, now accounts for between 30 and 40 percent of the total manufacturing costs.

One of the main reasons why top chemical executives have become so touchy on this issue is the fact that they are having to cope with ever higher oil prices at the same time. According to BASF, for example, competitors that operate polyethylene plant in the Middle East not only have 30 percent lower costs, but are able to buy raw materials more cheaply too.

So it is definitely time for a rethink. The current discussion of a renaissance of the Fischer-Tropsch process and of the use of sustainable raw materials,
rapeseed oil and bio-refineries to help meet at least part of the demand indicates that the chemical industry is indeed willing to adapt. Many of the exhibitors at this year’s ACHEMA in Frankfurt/Germany will also be addressing these issues, especially on 16 May, when a discussion called  “Across the petrochemical frontier” headed by a high-caliber panel will explore the CPI’s future prospects. With more than 900 talks lined up and some 4000 exhibitors, the organizers of this year’s ACHEMA have put together a record-breaking program that is unparalleled the world over, making a trip to Frankfurt an absolute must for all those who make investment decisions in this industry.

-Gerd Kielburger-