The European Chemical Industry 2006

1
The European Chemical Industry 2006

• Developments and Perspectives

2
Current Situation

• The chemical industry in Europe
• operates in an open and highly developed market
• responded in a comprehensive manner to the
  challenges of last decade (globalisation,
  technical and scientific progress, changing
  values)
• is the third-largest and one of the
  fastest-growing industries in the EU
• through its production makes a crucial
  contribution to prosperity and the quality of
  life in Europe
• as a producer of input materials is an
  indispensable component of complex value-added
  processes
• is a cornerstone of the economic innovation
  system
• apparox. 25,000 companies, of which 98 SMEs (lt
  500 employees corresponds to ca. 45 of the
  total production and number of jobs in the
  chemical industry)
• 1.7m direct jobs ( ca. 3m indirect jobs)

3
Changes in the Chemical Industry in Europe

• The chemical industry in the EU has been and
  continues to be characterised by
• numerous mergers (Aventis-Sanofi, Degussa,
  GlaxoSmithKline, Atofina, Wella, Bayer-Schering
  etc.)
• major divestments (Lanxess, Crop Science, ASTA
  Medica, Cognis etc.)
• focus on core business areas and rationalisation
  or specialisation
• outsourcing and reduction in workforce
• increasing importance of industrial and chemical
  parks
• increasing concentration
• new technologies transforming the chemical
  industry
• increasing importance of financial investors

4
New Challenges

• Against the background of ongoing global
  integration the chemical industry in Europe is
  faced with new challenges at the same time,
  competition is becoming tougher
• new competitors, particularly from Asia
• Decreasing population and rising average age
• Energy and raw materials policies
• EU chemical substances policy (REACH)
• IPP and S.C.A.L.E
• Health policy burden on pharmaceutical industry
• Chemical industry as lead sector for EU
  industrial policy (Lisbon strategy)
• Safeguarding the innovative capabilities of the
  chemical industry in Europe

I P P Integrated Product Policy
S.C.A.L.E Science, Children, Awareness,
Legal instrument, Evaluation
5
Forecast of Sales by Chemical Industry in
billion EUR
Source Deutsche Bank, Research 2005
6
Selected Market Positioning of various Chemical
Companies
Source Rehfeld, Legler et.al. Chemische
Industrie Neuorientierung, Innovationskraft und
Wettbewerbsfähigkeit,Munich 2004
7
Employment Index for the Chemical Industry for
selected countries
Index 1992 100
France
EU 15
Czech Republic
Germany
New EU members
Poland
Source VCI, Chemiewirtschaft in Zahlen 2005
8
Raw Material Index(HWWA Index of world market
prices for raw materials, US-based)
Energies
Industrial raw materials
09
Industrial raw materials Agricultural raw
materials (cotton, wool, hides, rubber, wood,
wood pulp) Non-precious metals (aluminium,
lead, copper, nickel, zinc, tin)
Iron ore, scrap (iron ore, steel scrap)
Energy Coal, crude oil
Source HWWA
9
The Future of the Chemical Industry in Europe -
Politicians Responsibility -

• The (revised) Lisbon Strategy must be adhered to
  and the political instruments and measures must
  be guided by it
• Reliable conditions for companies, investments,
  and innovation
• Ensure continued appropriate economic growth as a
  precondition of more jobs
• Secure and competitive energy supply
• Engage in active industrial policy (active also
  in financial terms)
• Strengthen Europe as an industrial location
• sustained increase in the research and education
  budget - both at the European and national
  levels
• Intensive support of biotechnology and genetic
  engineering, renewable energies, new materials
  and active substances, micro and nanotechnology
• Maintain and improve the good, existing
  infrastructure
• Subsidies for industrial start-ups
• Maintain and develop the European social model
• social security, equality of opportunities, and
  participation
• Acceptance of the chemical industry and its
  products must beimproved

10
The Future of the Chemical Industry in Europe -
Companies Responsibility -

• The increasing importance of labour as a factor
  of production must be taken into account
• Employees high qualification must be
  continuously adjusted and improved by means of
  in-company training and further training
• Acceptance of the chemical industry and its
  products must be improved
• higher priority for training and further training
• this also applies to blue-collar jobs
• Any inevitable re-structuring or reorganisation
  processes must offer perspectives for the
  employees affected and must be designed to be
  socially acceptable
• The chemical industry in Europe needs more
  product innovation
• process (cost reduction) innovation will not
  suffice in the long run
• Research and development as our most important
  asset must have top priority
• The rights of participation and co-determination
  enjoyed by employees must be understood as
  opportunities allowing us to survive in the face
  of global competition

11
The Future of the Chemical Industry in Europe -
Trade Unions Responsibility -

• Ensure social and labour-friendly policies in the
  European national states
• Acknowledge and analyse the increasing
  international competition faced by the chemical
  industry in Europe
• Participate in shaping the necessary
  transformation processes in the industry and its
  companies
• The opportunities offered by biotechnology and
  genetic engineering, renewable energies, new
  materials and active substances, micro and
  nanotechnology, and similar technologies must be
  acknowledged and pursued
• Acceptance of the chemical industry and its
  products must be improved
• Improve job opportunities of poorly qualified
  labour
• Intensify dialogue with national and European
  governments, associations, and institutions
  regarding the future of the chemical industry

12
Social partners of the chemical industry

• The European social dialogue offers opportunities
  and duties to contribute to the future
  developement of chemical industry and its
  employees.
• serves the interets of both social partners, but
  also policy.
• Opportunities and obligations for us
• To work on concrete issues which are in the
  interest of employees and companies in the
  chemical industry
• To evaluate, adopt and implement practical
  proposals and agreements between social partners
• To improve dialogue with the EU-Commission and
  European Parliament
• To mirror the results of the dialogue back on to
  national activities and to the national level.

13

• There is no better preparation for the future
  than to make good use of the present
• M. Herbert