FRANKFURT. Every three years, meet producers and processors of plastics at the K, the largest and most important trade fair for the industry. The organizers seem so to the schedule have a keen sense of the economy: In the fall of 2007, during the last K, it was dazzling in the industry. And when starting in a few days, the K 2010, you will find in the Düsseldorf exhibition halls almost as happy faces.
But in between the plastic industry experienced the most severe recession in more than four decades: The economic crisis of autumn 2008 gave it an unprecedented decline, followed by an almost equally strong economic growth. absorb the first time since the early 50’s had years the industry in 2009 a significant decline in production and sales. The plastics manufacturing shrank for the information industry association Plastics Europe worldwide by seven percent to 230 million tonnes.
Leading plastics manufacturer reported that 2009 sales declines of between 20 and sometimes over 40 percent. Especially in the final quarter of 2008 and the first quarter of 2009, the industry wrote on a broad front in the red. On average, the gains are likely to be broken in 2009 by two thirds. Only a year later, the world looks kind of far. For slumped nearly as severe as the business two years ago, it has recovered. Multiple industry associations and companies had to adjust forecasts for 2010 upwards.
Major European plastics producers such as BASF, Bayer, Solvay or rubber producer Lanxess reported for its plastics division in the first half year sales increases of between 40 and 50 percent. For the rest of the year it looks good. The Saudi chemical giant Sabic for example, one of the leading producers of commodities, announced for the third quarter operating income up 41 percent and for the first nine months rose by 150 percent. Similar progress is likely to report in the next few weeks a number of other companies.
The economic crisis has long-term trends in the plastics business that is not overridden. Since the 50’s growing years the sector faster than the world economy. Global production is expanding, according to Plastics Europe in five decades, an average of nine percent per year. For worldwide sales of the chemical industry of about two trillion dollars plastics are now contributing more than a third.
Also for the next few years is becoming apparent that the global plastics production grew more than the gross world product. Plastics Europe is expecting about four percent growth, some industry managers even more with five percent. A major factor behind the forecast is the dearth of emerging markets, where the plastics consumption per capita today is still far below the values of advanced industrial countries. Second, that a drive to the Western markets of the pressure for higher energy efficiency, demand for plastics, such as on insulation products for buildings.
Structural change is in full swing
In addition, the industry is still able to open up new applications for polymers and other materials to displace mainly glass and metal. High hopes for Europe’s specialty chemical manufacturers such as resting on plastics in the auto industry for greater use. The amount of the estimated plastics, BASF board member Martin Mueller’s brother, could in the medium term rise from 15 to 25 percent.
Parallel to the long-term market trend is undergoing a structural change. The production of standard plastics such as polyolefins (polyethylene, polypropylene), PVC or PET, which account for volume about three-quarters of global production, is increasingly dominated by companies from the Middle East or Asia. In the West, these polymers are almost exclusively produced by the chemical divisions of major oil companies and some companies such as Ineos and LyondellBasell.
The decisive factor behind the structural change can be reported to the high cost benefits, the Arab producers because their access to very cheap natural gas reserves. In particular, the European producers, whose production is based mostly on the relatively expensive raw material, crude oil, have serious disadvantages. Moreover, the demand for plastic general shift towards Asia, a trend that will continue.
The established Western chemical companies relocate so their investment in the Far East and set already increasing for years on specialties. This involves higher value plastics, such as polyurethane (PU) and engineering plastics, the more know-how in manufacturing and processing equipment and therefore require less price sensitive. Dupont and DSM have already adopted such practically completely from the standard plastics. BASF plans to retreat from the polyolefin and PVC business since the separation of most of its styrene plastics division. Dow Chemical tries to bring in their basic chemistry in a joint venture, with Arabic as chemical manufacturers.
In return, corporations first push from the Middle East and China in the business of specialty plastics. Sabic has about themselves to the purchase of GE Plastics provides a basis for three years and now aims to build its own capacity in the Persian Gulf. China’s Yantai Wanhua within a decade became the leading polyurethane provider in the home market and in 2009 took the first step towards globalization with a stake in the Hungarian company Borsodchem.
to defend the pressure on Western manufacturers, their position through innovation and superior technology, appears to diminish in the years to come. A total of 3,100 exhibitors from 27 October to 3 November at the K 2010 their latest developments for all industrial sectors present at the Düsseldorf Exhibition Centre.