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CHEMICALS, THE CRISIS IS BEATEN THROUGH EXPORTS
Internationalising in order to grow and also to respond to the global market crisis: the Italian chemical industry is playing the export card and the results are proving this to be the right choice. Exports in the first quarter of 2010 recorded a positive differential of 28.9% compared to the same period for the previous year, which could realign the overdrawn accounts caused by the recession scenario. It is an entirely Italian growth, since this important shift towards non-European markets is being increasingly driven by small and medium-sized businesses that choose to internationalise (a 15% increase from 99 to 2007), and that continue to represent the solid core of the sector.
The decision to offshore to countries such as Asia, aside from advantages connected with the availability of usable renewable energy resources, is aimed at making a significant contribution to overcoming certain traditionally critical aspects of the product.
"The industry’s trade deficit,” explains Giorgio Squinzi, President of Federchimica, “is concentrated in the base chemicals and fibres sector, whereas the trade balance for fine chemicals and specialties is positive. The production of varnishes, adhesives and inks, as well as that of detergents and cosmetics, which are highly specialised sectors in Italian chemical production, has shown particularly significant and consolidated growth for several years now.”
The implications of the choice to invest completely in offshoring soon become apparent from the mid- to long-term indicators: the latest estimates show an export increase of more than 21 percentage points over the last 19 years. This is consolidated by a base of over 45% of the industry operators that has chosen the foreign markets route to achieve significant economies of scale. Internationalisation has become the watchword for these companies, which have traditionally focussed on the internal market. This is particularly the case during a period of economic recession. If the decision to counter the crisis by concentrating more on exports has meant, on the one hand, having to deal with heavy losses in turnover, such as those in 2009, a year in which volumes fell by 4.7%, on the other hand it has led investors to diversify the map of target countries and carefully evaluate commercial risks.
The European connection has provided this global openness activity with solid commercial anchorage. It is no coincidence that the reference markets for the Italian chemical division remain prevalently located in the countries of the old continent. The Italian chemical industry’s geography of internationalisation includes the United States among its reference countries, followed by the emerging markets in Poland, Russia and Egypt. These are areas that were chosen to create true logistical bases for the implementation of production strategies to be developed over the coming 10 years. Current balance of trade forecasts indicate Asia as producing one of the most significant development performances. Between now and 2015, the growth of countries such as China is forecast to continue at a constant pace, becoming fivefold. Such consistent trends have led investors to choose these countries as operating platforms for export, as well as for improving their research and development activities. This further commitment is required by the wide range of activities in which the Italian chemical industry operates. The industry’s research efforts up to the present have allowed experimentation on eco-compatible and energy-saving solutions for housing and the automobile industry.
While work on these expansion projects proceeds at a rapid pace in Asia, in the Middle East and North Africa they are counting on base chemicals.
The gap recovery (base chemicals had an 8 billion Euro trade deficit in 2009) should begin precisely from these countries, where Italian chemicals are already fully established and their presence is beginning to be increasingly consolidated.