International U.K. report bullish on chemicals outlook The U.K. chemical industry is at a deci sive point in its history, notes the Na tional Economic Development Council there. Britain's membership in the Eu ropean Communities, coupled with op portunities for exploiting its North Sea energy resources, provides the industry with the best chance for some time to move into a phase of faster growth led by export sales. Against this background, NEDC's chemical committee has drawn up a report that takes a critical look at the growth prospects for the country's chemical fortunes in the coming decade. "Projections for exports and imports lead to the conclusion that there should be a favorable U.K. balance of trade in chemicals in 1980 of $2 billion at 1973 prices," the committee maintains. "This compares with $1 billion in 1973 and $1.3 billion in 1974." The 20-man committee, chaired by Lord Allen, and a 16-member industrial review party, chaired by Fisons' Stuart Woodhams, comprised representatives from industry, trade unions, and govern ment. The report's conclusions and rec ommendations stem from detailed studies undertaken by a forecasting panel and by 10 sector groups charged with evaluating the status and future potential of inor ganic and organic chemicals, pharma ceuticals, toilet preparations, paints, plastics, synthetic rubbers, dyes, fertiliz ers, and agrochemicals. The report isn't a government docu ment as such. But it provides pointers that government strategists no doubt will consider carefully when drawing up future plans. "This is not just an academic ex ercise," Lord Allen commented when he unveiled the report in London last month. "An essential factor [will be] subsequent action of all parties involved to change* the present industrial environment and shape the future industrial environment." Detailed recommendations are aimed at government, management, and unions
U.K. chemical output may grow 5 0 % by 1980 I
$J3illions
20 Output 15
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10
involved in the chemical industry, and at individual sectors of the industry. They also contain pointers for future review studies. But as Woodhams cautions, "however interesting this report may be in providing background information, its real value must depend on the extent to which the general and sector recommen dations are implemented." The study, begun in 1974, was under taken with three objectives in view—to update NEDC's earlier statistical sketch of the U.K. chemical industry published in 1973; to evaluate the impact of the va riety of factors that have arisen since that review; and to examine a nationally de sirable course of action to 1980 and be yond. In 1980, U.K. output of chemicals may be between 45 and 50% greater than last year in real monetary terms. In light of the depressed conditions that prevailed then, however, the increase probably will be about 35% if 1974 is taken as the base point, giving an annual output growth rate of about 5%. U.K. demand between 1974 and 1980 may advance by an average 4.75% yearly. Imports of chemicals into the U.K. are expected to grow 6.5% annually to 1980 from the 1973 level of $2.4 billion. Organic chemicals will account for upward to a third of the $11.2 billion worth of chemi cal imports in 1980. Exports of chemicals from the U.K. may grow about 7.5% per year calculated on the basis of 1973's export figure. The report points to the fact that U.K. prod ucts now are much more competitive fol lowing changes in sterling parity in the past few years. "This is borne out by the way in which, even in the worldwide slump conditions of 1975, export volume has fallen a good deal less than that of a number of competitors. The U.K. share of world trade may well improve, at least temporarily," the report opines. Organics, inorganics, pharmaceuticals, and plastics
are seen as the export leaders. Soaps and detergents, and agrochemicals, too, are expected to be fast growing export items. "Government policy should be directed toward increasing the level of investment by chemical industry in the U.K.," the report recommends. To this end, official statements fostering investment confi dence "would be beneficial," it adds. "It is essential that inflation be brought under control. In addition, government should take all steps open to it to ensure that sterling does not again become overvalued." Chemical industries, for their part, should "bring their own objectives and [those] that would be beneficial to the U.K. as much as possible into line. In ad dition, manpower planning [with the trade unions] has an increasingly impor tant role to play in the industry's devel opment." Among the sector recommendations, the organic chemical committee sees scope for highlighting the advantages that the U.K. offers to non-U.K. companies that might consider building plants there. One such advantage is that the country's short, fast-flowing rivers give the U.K. an edge over many Continental locations as regards stringent effluent control rules. "The availability of [manufacturing] sites in Western Europe is becoming limited," the report notes, "and the U.K. appears to offer many favorable attributes for at tracting manufacturers." D
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1973
74
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Note : Calculations based on 1973 prices. Source: U.K. National Economic Development Office
80 April5, 1976 C&EN
11
