HOUSTON — Although 1999 will be a tough year for Western European polyethylene makers, the industry is in better shape than during the previous trough of 1993 and can further improve itself through consolidation, according to an industry executive.
Rob van Ooijen, manager of business research and strategic planning for DSM Polyethylenes in Sittard, the Netherlands, said PE demand in Western Europe should grow 2.5 percent annually through 2010, but producers still must expand wisely while closing inefficient plants to remain competitive on a global basis.
``Scale should not be the only driver of expansion,'' he said at the DeWitt World Petrochemical Review. ``The industry needs to ask if expansion provides balanced growth and profits.''
DSM, Europe's fourth-largest PE maker, also anticipates globally competitive plants for PE and other plastics will eventually be focused around one of three existing petrochemical pipeline grids. The grids are in southern France, central England and a region bordering Germany, the Netherlands and Belgium.
``We have to do more if we are to be able to compete with our American counterparts on the Gulf Coast,'' van Ooijen said. ``We must extend our pipeline grids for the benefit of higher production flexibility and in case of ethylene imbalances.''
And since DSM controls half of European low density PE capacity with annual capacity of 1.3 billion pounds, it has high hopes for that material as well.
``LDPE is making a lot of money when compared to high density PE and linear low density PE,'' van Ooijen said. ``It continues to be well-accepted by the market.''