On 1 May 2004, 10 new members states joined the European Union. This development will substantially impact companies in the chemical industry operating in the enlarged EU market. Our thought leadership paper examines the following:
- The current structure and performance of the industries, focusing especially on those in the new member states.
- How the enlargement process has already affected companies in the industry.
- Key opportunities and challenges facing companies in the industry.
- Anticipated rapid economic growth presents a substantial opportunity for Western producers looking to increase investments or sales in the region, although challenges still remain.
Key messages from the report include the following:
- Expected economic expansion in consumer markets should provide a boost to demand for chemicals used in consumer products such as cosmetics, household detergents and paint.
- Outlooks vary for individual subsectors, and the level of foreign direct investment to date is also somewhat uneven. For example, major players in consumer goods industries are already present in the region, while there has been relatively little investment in the fine chemicals sector. Established, but small, local players in the performance chemicals sector may also need to reduce costs or increase productivity to stay competitive, and man-made fibre producers may also need to modernise. Take a look at the full report for individual sector outlooks.
- Environmental legislation presents a huge compliance challenge, but substantial EU funding is available to assist.
- Technical issues. Enlargement will raise technical issues around Customs/VAT and labour laws/social security for companies operating in the region. Listed companies in the accession territories also need to use International Financial Reporting Standards (IFRS) from in January 2005.
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