Where Next For European Petrochemical Manufacturers?

photo: arabianoilandgas.com

Times have been tough lately for European petrochemical producers. With demand depressed since the second half of 2008, margins have been squeezed and profitability has been severely impacted.

This is further compounded by the tidal wave of new capacity coming on stream in the next few years. A number of huge petrochemical complexes are now commissioned and many more will start-up between now and 2012.

For the manufacturers this translates into significantly reduced operating rates, demands to cut costs and a highly concerned workforce, worried about future job security.

This is not an easy set of factors to manage. Strong leadership is absolutely essential. Costs must be cut but without significantly increasing the levels of risk - effective management of change is a must. There must be an absolute focus on 'doing the right things' and eliminating all types of waste throughout the entire supply chain and in all of the service functions. Good people management means communication (and more communication), empathy and a very clear sense of direction.

Even with all of this, there will be casualties. More plants will have to close down in order to restore the supply/demand balance and as I've noted previously, this is a process which needs strong project management in order to achieve best results.

It is a very tough and sometimes lonely time for manufacturing managers. Most important is to take control - identify strategies for dealing with all of the issues and keep looking at the horizon. In this way you'll be best prepared for whatever is coming.