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Industry group sees so-so year in Europe The European Chemical Industry Council (CEFIC) at its annual meeting earlier this month in Amsterdam predicted that, if a number of things go right, chemical production in 1996 will rise as much as 2% over last year, following a 2.5% increase in production volume last year over 1994.
The biggest proviso, according to Simon de Bree, chairman of Dutch chemical producer DSM and president of CEFIC, is that the current pause in the business cycle will be followed by a pickup in activity in the second half of this year. Other delegates to the council's meeting were not completely sanguine about that.
De Bree noted, however, that "the balance of risks is generally on the downside, and reflects a number of factors, including the continued lack of consumer confidence, tight fiscal policies, concern over export prospects, and stock levels that are still not back to normal." Nonetheless, he told the assembly, "1996 will be a positive year for our industry."
Yet uncertainties still cloud the outlook, he conceded. Even though output probably will be up over 1995 and chemical prices have begun to strengthen this year, it is unclear at this point whether the price increases will continue, or even hold their own. And employment is unlikely to stabilize, although, de Bree added, "My personal
belief is that we may have the largest reductions behind us."
Meanwhile, he pointed out that capital spending is forecast to be unchanged this year from the levels of 1995, although an increase might have been expected given low real interest rates in countries throughout Europe.
De Bree's wrap-up of 1995 and outlook for 1996 were one part of the open session of CEFICs annual meeting. In other business, Jurgen Dormann, chairman of Germany's Hoechst, was elected vice president of CEFIC. He will succeed de Bree as the council's president in January 1997.
CEFIC presidents select their own themes for emphasis during the term in office. But Dormann will probably be picking up and developing one of de Bree's pet themes during his term—the issue of the competitive position of the European chemical industry versus the rest of the global industry. The council has done some intensive lobbying with the European Commission, the administrative arm of the European Union, to press its case for a legislative framework that won't actively liinder, and may actually assist, the industry in its fight to maintain its global market share.
To some extent, de Bree reported, CEFICs work has been successful. Earlier this year, for example, the European Commission published a position
de Bree: overall, 1996 will be positive year
paper on an industrial competitiveness policy for the European chemical industry. In that paper, the commission says that the European chemical industry "is among the most modern and competitive in the world." But, it continues, the industry "faces a set of challenges that must be met if it is to maintain and, if possible, strengthen, its international competitiveness. It is important to promote a level playing field, at least with the main [industrialized] and newly industrialized competing countries, in terms of market access, environmental framework, and, if possible, competition rules and fiscal and social regulations."
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Of this position paper, de Bree said with wry understatement, "We are very pleased . . . It indicates which actions the European Commission will take in order to support the European chemical industry in meeting its challenges^ in the years to come.
Cooperation with the commission, he added, is important in such areas as European-level support for the industry regarding the World Trade Organization (WTO). CEFIC is concerned, he said, by the "delay in implementation of WTO— the treaty is one of the main instruments for achieving a level playing field worldwide and it is therefore important to expedite its implementation.,/
In that regard, CEFIC is intensifying its work with its counterpart industry groups worldwide, through the framework of the International Council of Chemical Associations. For the time being, most of those other organizations represent one country—the U.S/s Chemical Manufacturers Association, for example, or Japan's chemical industry association. CEFIC, on the other hand, represents some 21 countries through their chemical federations and major multinational chemical companies, so it must pull a variety of views into one cohesive vision.
As CEFIC frequently points out, it predates the founding of the European Community and has always been more inclusive than that federation. And it is now expanding to accommodate countries such as Poland, Turkey, Hungary, and the Czech and Slovak Republics, making it a far more Pan-European organization than the European Union itself.
One of de Bree's innovations at CEFIC has been establishment of its annual Science Education Award, open to countries that have chemical industry associations affiliated with CEFIC. Its second award—a trophy and check for 5,000 ecu (about $6,160)—was won by intermediate-grade (age 15) students from St. Columba's College, Stranorlar, County Donegal, Ireland.
The winning project studied the incidence, severity, and treatment of asthma among some 1,800 local 12- to 17-year-olds. The students devised survey models and questionnaires, and analyzed dust samples from homes of both asthmatics and nonasthmatics. The research included a control group and a study of existing medical treatments by reading literature and contacting pharmaceutical companies in Ireland.
Patricia Layman
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