Home asia France industry still growing despite lockdown, China acrylics suffer on wider Asia – Arkema CEO

France industry still growing despite lockdown, China acrylics suffer on wider Asia – Arkema CEO

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France industry still growing despite lockdown, China acrylics suffer on wider Asia – Arkema CEO


LONDON (ICIS)–The four-week lockdown imposed
by the French government last week will not
bring the economy “to a standstill” like the
one in the second quarter, with key downstream
sectors operating normally, the CEO at French
chemicals major Arkema said on Thursday.

Thierry Le Henaff said France currently
accounts for only 8% of company sales, although
he conceded the lockdown in the second quarter
had greatly affected its operations, especially
those of its adhesives and sealants division
Bostik.

Arkema published earlier on Thursday its
third-quarter results; despite improving from
the second quarter, year-on-year sales
and income fell sharply
.

SECOND WAVE, SECOND
LOCKDOWN
France was the first
major economy to announce a new lockdown to
stop the spread of the pandemic’s second wave,
which is hitting Europe hard; Germany and the
UK followed suit soon after.

But the lockdowns currently in place – Italy
and Spain have also imposed restrictions to
mobility but fell short of imposing full-on
lockdowns – are less stringent than those in
the spring, and several economic sectors
continue to operate as normal.

Among them, building and construction, which
are key sectors for Bostik.

“Sectors linked to building and construction
gradually recovered over the summer and they
are still doing quite ok. Because of that, for
us this lockdown is quite different to the
previous one, especially for Bostik which was
greatly affected earlier in the year; it is
doing quite ok now,” said Le Henaff, speaking
to reporters from Paris.

“There is an element of uncertainty, however;
nobody can really say what the consequences [of
this lockdown] will be, but I feel we are not
in the same position. There will be an impact,
but the economy will continue to grow.”

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Despite the improvement, Arkema expects sales
in the fourth quarter to be 7% lower year on
year, with its Intermediates division suffering
the most, it said. Under that division in the
third quarter, improving demand for polymethyl
methacrylate (PMMA) could not offset worse
metrics for sales of fluorogases or acrylics,
the firm said.

Adhesives, sealants and coatings are expected
to post healthy operations in the last quarter
of 2010; performance polymers are expected to
post “sequential improvement” from the third
quarter.

CHINA: ACRYLICS
SUFFER
Acrylics in China was one
of the worst performing products among Arkema’s
offering during the third quarter, but the CEO
said the dip had to do more with conditions in
wider Asia than China itself.

While China’s official figures show its economy
is quickly recovering to pre-pandemic levels,
other Asian developing economies are still
reeling from the sharp fall earlier in the year
in global trade in goods as well as stringent
domestic  measures to contain the
pandemic.

“Overall, China demand is quite solid and, in
terms of volumes overall, we are more or less
at the levels of last year, although there are
variations depending on the sector. In
specialty chemicals, the situation is quite
good – batteries, for example, is doing very
well in what is becoming a very important
market in China,” said Le Henaff.

Lithium-ion batteries are set to become key for
transport electrification and are widely used
in electronics; Arkema sells resins, carbon
nanotubes, electrolytes salts and polymers to
the industry.

“Acrylics [in China] is still volatile and is
suffering from the worldwide economic
conditions; Asian economies import many
acrylics that are produced in China; it has had
an impact in both [selling] prices and volumes,
although this was overall expected,” added
Arkema’s CEO.

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“Asia [economic conditions] should however
normalise. The situation is better than in the
spring, and continues to improve. Perhaps is
not exactly what we would like to see, but is
heading into the right direction.”

EU GREEN PUSH: A BALANCING
ACT
The EU has set out plans to
fully decarbonised by 2050, and the president
of executive arm the European Commission wants
industry to be diligent.

But the energy-intensive chemicals industry
still lacks many of the technologies needed to
be carbon dioxide (CO2) neutral, and its high
consumption of electricity puts a burden in its
emissions costs outlined by the Emissions
Trading Scheme (ETS).

In an interview with ICIS, the head of European
chemicals trade group Cefic said in September
the EU’s Green
Deal is “hugely challenging”
  for
chemicals, adding that the EU should engage
with the industry and set out realistic
decarbonisation time scales.

The efforts the chemicals industry would need
to make are immense; Cefic’s Marco Mensink said
that, among others, by 2030 new technologies
like bio- or carbon dioxide (CO2)-based
chemistry, chemicals recycling, or electric
crackers would need to be rolled out in order
to meet the latest targets on emissions.

Le Henaff conceded there is “an element of
discussion” regarding how far the chemicals
industry can go, although insisted that both
decarbonisation and chemicals can go hand in
hand as the industry would be the provider of
many of the materials needed for the endeavour.

“We take the EU green push as an opportunity,
and we aim to improve the transparency  of
our products, of our production methods, and
the sector has greatly improved its emissions
record, water or energy use, etcetera,” he
said.

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“Beyond that, there will be opportunities for
chemicals coming from the green agenda: in
mobility, in batteries… You have to look at
both sides: some CO2 emissions from chemicals
can save more emissions from our customers.

“These are things we need to explain to the
Commission [so they can see] what we are able
to do [both in terms of decarbonising and
providing greener materials]. The Green Deal
goes on the right direction and we will
continue to discuss [its implementation].”

Front page picture: A Paris resident cycles
down an empty street on Thursday

Source: Ian
Langsdon/EPA-EFE/Shutterstock 



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