1. HELSINKI CHEMICALS FORUM
COMPETITIVENESS – FINANCIAL CONSTRAINTS
Framework Conditions for a Sustainable and
Competitive Chemical Industry in Europe
Hubert Mandery
Cefic
Helsinki, 21 May 2010

2. Prof. Jean-Marie Lehn – Nobel Laureate 1987
Chemistry – The Central Science in the 21st Century
“ Chemistry will undoubtedly remain the central science
in the 21st century. After bringing to mankind the
fundamental discoveries which have changed our daily
life for the last two centuries, it will now be at the heart
of a new scientific era, where many sciences will merge
and cross-fertilize for the benefit of innovation.
Thus, chemical creativity and knowledge will be needed
everywhere.”
Prof. Jean-Marie Lehn – Nobel Laureate 1987
(Chemistry for Life 1997)

3. The European Chemical Industry: Still a Successful Global Player
Contributes to 29% of the
World’s chemical sales
Represents 29,000
companies (96% SMEs)
Employs 1.2 million people
Generates € billion of
revenues
Creates a trade surplus of
€ 42.5 billion
PL 2.3%
SE 1.4%
AT 1.3%
FL 1.3%
CZ 1.1% HU 0.8% PT 0.6% RO 0.6% Others 2.3%
Source: Cefic; 2009 figures; excluding pharmaceuticals

4. EU Chemical industry losing share in a fast growing global market
Geographic Breakdown of World Chemical Sales vs. 2008
1998: € 1095 billion
2008: € 1950 billion
EU Chemical industry losing share in a fast growing global market
Source: Cefic Chemdata International

5. High Level Group on the Competitiveness of the European Chemical Industry (2009)
Recommendations on Innovation and Research 10 Regulation 3 Human Resources 3 Energy & Feedstock 5 Climate Change Policy 5 Logistics 5 International Competitiveness & Trade 8 39

6. EU Chemicals Trade Flows in € Billion (2009)
NAFTA
20.5
32.2
Rest of
Europe
29.5
19.5
Asia*
29.6
22.5
LAC**
3.1
7.0
Japan
5.3
5.1
Africa
2.4
8.0
Rest of
the World
1.4
5.4
Source: Eurostat and Cefic
* excl. Japan; **Latin America and the Caribbean

7. EU Chemicals Trade Balance with other Countries/Regions
USA
Japan
Brazil
Russia
India
China
South Korea
Middle East
Asia
Rest of Asia
Basic Inorganics
Petrochemicals
Polymers
Specialty Chemicals
Consumer Chemicals
Chemicals (sum)
EU has a trade deficit and its competitive position weakened
EU has a trade surplus but its positive
competitive position weakened
EU has a trade deficit but its weak competitive position improved
EU has a trade surplus and its healthy competitive position improved
( ) vs. ( )

8. Trade and Competitiveness: Open Markets and Fair Competition
No weakening of the current European Trade Defence Instruments
EU to pursue Free Trade Agreements (Korea, India, etc. )
Address double pricing
Strive for more global harmonisation of customs procedures
Level playing field for access to raw materials

9. Smart Regulation: Still a Dream
Plethora of chemical legislation: about 1000 EU legislative texts in 15 years
Inconsistencies: lack of coordination (Toys Directive, RoH’s, Construction Materials, etc.)
Uneven enforcement in Member States: IPPC
No or weak enforcement: imported pharmaceutical ingredients
REACH: publishing of notified research substances
€ 1 bn burnt and only few results: Biocides Directive

10. REACH: Unique, Complex and Ambitious
Industry is highly committed to make REACH work
EU substance legislations must be consistent with REACH (RoHS, Biocides, ...)
Uniform enforcement within EU wanted
Regulatory convergence ? Not on the ambitious level of REACH
Conceptional flaws to be remedied (SIEF concept …)
REACH: a barrier to trade?
GPS (Global Product Strategy) – industry’s contributions to regulatory convergence and to the SAICM goals

11. Climate Change – a Global Challenge requiring Global Solutions
Unique European ETS : unilateral burden for EU manufacturers
Chemical Sectoral Agreement: no partners outside EU found
Border Tax: risk of trade war
Premature and overly ambitious: -30% carbon reduction goal by
2020
Action on climate change is a huge business opportunity, but
Europe must get it right;
Guiding principle: resource efficiency

12. Innovation Essentials
Educating and attracting talent: meet new skills demands
Topical innovation networks on key societal challenges
New innovation policies and instruments
Cooperation throughout the value chains and across sectors
and borders
Intellectual property protection & fight against counterfeiting
Confidence and trust from consumers, customers and investors
Smart regulation

13. Logistics Recommendations
Further develop local cluster platforms
Foster wider use of intermodal transport
Revitalise railway freight transport
Address the massive congestion of the road network
Close gaps in the olefin pipeline network

14. Conclusions: Quality Cooperation between Industry and Politics needed
Innovation is key for more growth with less resource consumption
Smart regulation takes the competitiveness of industry into account
Level playing field for sourcing energy and feedstock
Open markets with fair competition