Indeed, our research suggests that new global capacity being developed in the coming years will render 14 of 43 crackers in Europe uneconomic by 2015. The closure of these plants would correspond to the loss of 26 percent of total cracker capacity in Europe.
At the same time, Middle Eastern chemical producers continue to seek expansion along the value chain into higher value-add solutions. Their Chinese counterparts are attempting to fulfill a government directive to make the country self-sufficient in chemicals. These Middle Eastern and Chinese entities are often cash-rich and backed by government support. A rapid path to achieving these goals appears to be offered by acquisition of technology and intellectual property from a European chemical industry seemingly beset by structural problems.