Brexit will be the single biggest challenge for the Dutch petrochemicals industry from 2017. With the industry highly reliant on exports as well as domestic demand from export-oriented manufacturers, the sector is facing significant downside risks. However, this is counter-balanced by its high level of integration and competitiveness, particularly in high-value end products, as well as the cost advantage of its dominant naphtha feedstock. These factors have enabled it in the past to thrive in an increasingly difficult export environment and should prevent a collapse in the sector.
In 9M16, Dutch chemicals output grew 4.4% y-o-y while rubber and plastic grew 3.7% y-o-y, comparing favourably with 2.0% overall growth in manufacturing. This marked a strong turnaround from the 2.5% decline in chemicals in 2015, which was accompanied by a more modest 2.8% growth in rubber and plastic output. The trends were largely due to the shutdown of Shell's 910,000 tonnes per annum (tpa) ethylene unit in Moerdijk as well as Ducor's force majeure on polypropylene supplies from its 180,000tpa plant at Rozenburg. Additionally, overall manufacturing growth in 2015 came out at 0.5%, giving little support for growth. The rebound in 2016 was due to growth from a lower base historically, with the industry returning to normal rates of output.
The vote by the UK to leave the EU poses a significant risk to exports given that the UK accounts for roughly 10% of the Netherlands' total exports. We expect to see industrial production and exports take a hit from the recent weakness in the British pound and uncertainty over how upcoming negotiations unfold.
Investment programmes from 2016 contain few, if any, plans for significant capacity expansion. However, BMI does not envisage any reduction in capacities and the industry will remain fairly stable, capitalising on its high level of integration through the supply chain as well as highly advanced added value segments.
The upside to the Dutch petrochemicals industry is Indorama's increase in purified terephthalic acid (PTA) by 300,000tpa to 650,000tpa at its Rotterdam plant, providing feedstock to its European polyethylene terephthale (PET) operations. The expansion was due to be finished by end-2016.
With 72.8 points, the Netherlands is in second place in BMI's Risk/Reward Index (RRI) ranking for the European petrochemicals industry, down 0.4 points since last year due to the effects of Brexit on its risk score. It is 1.0 point ahead of the UK and 8.7 points behind Germany. The Netherlands scores close to the Western European average in petrochemicals-related scores and its risk scores are still above the regional average, marking it out as a prime investment destination.
The Netherlands Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Netherlands Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Dutch petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Dutch petrochemicals market.
- Target business opportunities and risks in the Dutch petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Netherlands.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.