Chem Industry Looks Beyond Downturn Toward Flexible Future

March 1, 2009
Given the seriously depressed state of domestic economics and reduced consumer spending, initial chemical industry growth coming out of the downturn will “probably be overseas,”  projects Dr. Kevin Swift, chief economist of the Arlington, Va.-based American Chemistry Council (
Following hurricanes in the summer and fall of 2008, “orders did not come back. In some cases, sales and production of key chemicals were off by as much as 30 percent,” Swift observes.U.S. chemical industry sales volumes declined by 3.1 percent in 2008, Swift says. Even though leading economic indicators that forecast six months ahead “show no bottom,” he said in late January that he hopes to see some positive movement by this year’s third quarter.  However, a late November 2008 analysis by the Council forecasts another 3.6 percent drop. “If I were to redo the estimate, I would be decidedly more pessimistic,” he concedes.Overseas, European chemicals have also experienced declines. “For the first time since 2003, the EU [European Union] chemicals industry’s output, excluding pharmaceuticals, declined in 2008,” notes Dr. Gernot Klotz, executive director of research and innovation of the Brussels-headquartered European Chemical Industry Council (Cefic,, a member of the Arlington, Va.-based International Council of Chemical Associations ( Analysis of October 2008 data, the latest available, shows output in the EU chemical industry, excluding pharmaceuticals, decreased by 6.3 percent that month, using a year-on-year comparison. But the first 10 months of 2008 showed a decline, excluding pharma, of 0.08 percent, compared to 2007, he adds.Klotz sees several challenges for European chemicals makers. One is diminishing growth stimulus from external demand, due to weaker growth prospects for overseas exports and much stronger import penetration from polymers and speciality chemicals. Another is the comparative price and feedstock disadvantage in olefins and that class of chemicals’ derivatives.The current challenging environment presents the European industry with two alternatives, he says. One is to go where the growth is. The other is to develop new business plans for facilities that are easy to tune to meet new opportunities. That second alternative has led to the F³ factory—where F equals future, fast and flexible—a forward-looking project of the Belgium-headquarted European Technology Platform for Sustainable Chemistry ( “The factory of the future will showcase the value of efficient, low-impact manufacturing,” explains Klotz.In the United States, Swift believes projects geared to higher efficiencies will find more favor and be more prone to be funded. And those will include “end-users who are trying to get more new automation or updated automation.”Connecting systemsDow Chemical Co. ( is one end-user that is working to improve automation systems’ vertical integration. That refers to the interconnection and integration of information systems from basic process-control systems up through manufacturing-execution to enterprise systems, states Eric Cosman, engineering solutions consultant in Dow’s manufacturing-and-engineering operations, Midland, Mich. “We provided this level of integration many years ago using our proprietary software solutions—and we want to sustain this capability using current commercial solutions.”His company also has focused on providing improved capability for the reporting of process operations performance using a production dashboard concept, Cosman reveals. “[And] we have a very active program that is focused on maintaining a high level of security for our manufacturing operations and control systems, through the application of good practices developed in the process industries.”Cosman sees increasing need for detailed information technology (IT) skills to keep operating systems and networks working properly. “The problem is that these skills are generally not available in the numbers required.” Thus, he believes that “there has to be more work done to turn these systems into something that is understood and can be supported by operations personnel, without the need for detailed and often arcane IT expertise.”C. Kenna Amos, [email protected], is an Automation World Contributing Editor.American Chemistry Councilwww.americanchemistry.comEuropean Chemical Industry Council
Cefic, www.cefic.orgInternational Council of Chemical Associations
www.icca-chem.orgEuropean Technology Platform for Sustainable Chemistry
www.suschem.orgDow Chemical Co.

Sponsored Recommendations

Understanding and Using E-Stops

E-stops, or emergency stop switches, are used to ensure machine as well as personnel safety. They are used to provide a consistent and predictable failsafe response on a wide ...

Demystifying motor disconnect switches: What are they and how are they used?

From conveyor belts to drum mixers, motors are used in virtually every industrial application to drive machinery. Equipment downtime is the main motivation behind monitoring and...

Full Line of DIN Rail Terminal Blocks Video

Altech offers an extensive line of DIN Rail Terminal Blocks including all major Connection Technologies available in the industry to meet requirements for a vast variety of applications...

The Value of Integrating DIN Rail Cylindrical Fuse Holders Into Your Designs

What short circuit currents do I have to consider when purchasing a DIN rail cylindrical fuse holder? That data is available from the manufacturer. For example, Altech cylindrical...