In the third quarter of 2013, the economic activity indicator in the chemical sector remained on a similar level as in the previous quarter. The situation in the business was evaluated as generally positive (from +15 in July 2013 to +12 in September 2013), although sentiments had been slightly more optimistic in the previous months.
Polish chemical sector after 2012
Domestic industry is still trying to cope with difficulties linked to both global economic stagnation and the end of investment activity which preceded Euro 2012 football championships organized in Poland and Ukraine. The petrochemical and plastics businesses are now in the best situation among all chemical companies, with packaging manufacturers emerging as leaders of growth.
Experts’ forecast for the coming months
Representatives of the largest global chemical companies agree that at the end of 2013 markets will remain stagnant. Upward tendencies shall be curbed by continuing economic depression and uneven pace of growth in various parts of the world.
European – meaning also Polish – chemical industry is now facing the following challenges:
a) growing competition from Asian and US companies,
b) high prices of energy resources,
c) strict EU environmental protection policy,
d) poor internal demand.
Such situation provokes market players to intensify the frequency of mergers and acquisitions, improve financial discipline and rationalize product portfolio. European manufacturers are trying to compensate for lower demand by increasing prices (by c. 2.7% annually).
EU policy on energy
One of the primary challenges for the European chemical industry is EU energy policy. Demanding regulations may influence both the production cost and employment rate in the industry. For Poland there is another problem: the skeptical approach of the European Commission to plans of excavating shale gas, and ensuing changes of Polish legislation.
Articles prepares by Strategy and Development Team of Grupa Azoty “PUŁAWY”, headed by Andrzej Górecki.