THE HAGUE, NETHERLANDS - The polyurethane industry should aim to build growth in Europe to ensure that the production base allows the downstream industry to maintain competitiveness in Europe and globally. That was the message from Charles Churet, the newly appointed commercial director, Europe, for Dow Chemical Co.'s polyurethanes business, who gave the keynote address to an audience of PU experts at the UTECH '96 conference and exposition, held in The Hague, March 26-28.
``Raw materials producers can support the industry wherever it goes,'' but growth is needed to maintain the level of investment in Europe, Churet added.
The challenge for the PU industry is to defend the European base from a cost point of view, he said.
Churet addressed a central theme, that the industry needs growth, and that this growth depends on ``competitiveness, innovation, and sustainability'' - the three key factors for growth in the polyurethane industry, he said.
Growth in the PU business has been ``faster than global [gross domestic product] growth,'' but Churet asked ``where will we be tomorrow?''
``We must know where we are on the growth curve,'' he said, adding: ``the only way to predict the future is to create it.''
Looking at where the industry is today, Churet said the opening up of global frontiers had led the way toward real harmonization of business practices.
The current productivity of chemical plants has, he said, led to the joke that in the next millennium they will be operated by one man and a dog.
``The man is there to feed the dog and the dog is there to make sure the man does not touch anything,'' he said.
Churet pointed out that the polyurethane raw materials supply business is global, with a few players investing in capacity on a number of continents, and shipping material to users as demand dictates.
But ``cost structures in different areas are different,'' and this can cause global pressures when supply is long or short, Churet said.
So ``while we have volume connectivity, we do not have cost connectivity - and this is highly significant here in Europe,'' he added.
To provide sustainability for new investment needed to support growth in the downstream PU industry on all continents, raw material producers must find ``avenues which enable Europe to remain competitive,'' according to Churet.
The region is struggling with high labor costs, and it is inevitable that polyurethane product manufacturers ``will move to lower-cost production areas.''
But for the raw materials suppliers, labor costs are far less significant than other considerations: ``the logistics we have in place, or the scale, integration and capital intensity of our plants and their European presence,'' Churet stressed.
European raw materials suppliers must aim for competitiveness everywhere: supply chain integration, better resource use, better site integration, better investments, and better utilization of capacity.
Each producer must raise productivity Churet said, but he also stressed that, ``value creation is a goal we all must share.''
Polyurethane producers must ensure that value is created and distributed fairly and equitably along the value chain or instability could be created, risking collapse of the entire chain, he said.
Churet said another common challenge is that of growing the ``whole polyurethanes market through our creativity and innovation. We must increase the speed and quality of product, process and application solution development for the markets of the new millennium.''
The PU industry has ``a remarkable history of penetrating new segments and creating new applications to satisfy consumer needs. Keeping this momentum is critical to our destiny in the new millennium,'' Churet said.
``We need the growth to fuel our innovation, but we need the innovation to drive the growth,`` he said.
Finally Churet addressed the third crucial and common challenge for the polyurethane industry: sustainability, a challenge which the industry must be frank and open about, both amongst itself and to the rest of the world, he said.
``We know the PU industry is environmentally sustainable, and we need to tell the outside world this,'' he said.