Brexit vs. Chemical Industry
A ‚Bad Signal‘ – What the 'Brexit' Means for the Chemical Industry
Chemicals companies in the UK export products worth US $ 71 billion each year, some of which are now threatened by the vote. The British industry consists mainly of small, export-focused manufacturers after the sale sale of Imperial Chemical Industries (the biggest British chemical operator) to Akzo Nobel (the Netherlands) in 2008. Now, as most companies in the UK don’t have the level of integration that big multinationals have, lobby groups fear for the industry’s security.
Industry analysts expect that multinational chemical producers might reconsider investments in Britain, given the current uncertain situation. Currently, about 62 percent of the British Chemical Industries Association’s members would support remaining a part of the EU with 38 percent stting having taken no position on the matter. As a comparison: If the referendum was held today, around 52 percent of the UK’s population would vote to stay.
An Analysts Perspective
Given the challenge that the US shale revolution poses for European chemical manufacturing, the British industry even urges for a closer cooperation with other European economies to improve competitiveness.
All anlysts agree that, should Britain leave the EU, the impacts would be far-reaching and complex. Britain has a trade deficit with the EU of around 60 billion ounds per year – a factor that is often cited as a main reason to vote for a leave. But the EU might have more pull, as it buys around 45% of Britsih exports (only around 7% of EU exports go across the channel).
This enormous strade volume is now at stake, analysts fear. It is quite possible that a future UK might negotiate some free trading with Europe, but it will surely come at a price and take some time to develop.