SOCMA confident of healthy growth for chemicals
The result of the fourth annual business outlook survey by the Synthetic Organic Chemical Manufacturers Association (SOCMA), carried out in November, suggests healthy growth prospects and capital expenditure for its members.
The result of the fourth annual business outlook survey by the Synthetic Organic Chemical Manufacturers Association (SOCMA), carried out in November, suggests healthy growth prospects and capital expenditure for its members.
SOCMA admitted during the survey launch at Informex that the results could be very different had it been taken in January 2008, as confidence in the US economy has since taken a dramatic dive.
According to the survey, 76% of respondents said they had seen a net sales increase. This compares with 79% experiencing an increase in 2006. The spend on r&d was expected to increase, with 30% of respondants investing between 6-10% of sales back into r&d. This figure is up from the 20% expecting to invest that amount in the 2006 survey.
The number of companies expecting to make capital investments next year increased to 52% compared with 44% in 2006.
Outsourcing is expected to increase further, with offshore competition from China and India and rising fuel prices seen as the major concerns.
The US industry also faces burdensome legislative issues as a result of the implementation of the US Department of Homeland Security 's Chemical Facility Anti Terrorism Act of 2006.
SOCMA is currently lobbying on behalf of its members who feel that mandating inherently safer technology (IST) in a regulatory context under the guise of chemical security "would result in government micromanagement of the design and engineering at individual facilities, would impose burdensome paperwork requirements on the regulated community" and "could lead to manufacturers moving production overseas." The trade body is also calling for IST decisions to be based on "overall risk" and not simply "inherent hazards".
The Act, introduced as a result of 9/11, aims to ensure such plants are secure against terrorist attack. SOCMA said: "Millions of dollars have been invested following 9/11 to implement additional security measures above and beyond those that are put in place in accordance with normal operating procedures at a chemical facility".
Meanwhile, the US government is proceeding with its requirement for certain chemical sites to complete a Security Vunerability Assessment (SVA). This is another aspect on US law since 9/11 that is requiring extra time and money.
SOCMA has some 300 members involved in specialty and custom chemical manufacture and many of these companies are still struggling to get to grips with the implementation of the new rules on site security and they require guidance, the trade body said.
