IHS Chemical Week

CHEM IDEAS

Dinner with the CIA...

6:16 AM MST | March 5, 2009 | By ALEX SCOTT

Yes there were questions, yes there were intelligence documents distributed on a single table in the center of a dimly lit room, and yes carefully worded information changed hands. But no, it wasn’t that CIA, but the U.K.’s CIA – the London-based Chemical Industries Association - that held last evening’s meeting. At this, the CIA’s regular briefing for journalists, it was less about interrogation and more about discussion and leading opinion.

 

Topics tabled included the lack of skilled workers and chemistry graduates that are emerging from the U.K.’s education system, emergence of regulations, concerns that energy prices will again rise in the U.K., and perhaps above all that the U.K. government should be providing the U.K. chemical industry with a greater buffer to help it weather the current economic storm.

 

CIA is lobbying the U.K. government to introduce a series of concessions to help chemical firms bear the current market conditions. At the heart of CIA’s request is a call for a temporary reduction in corporation tax and the burden associated with provision for pensions along with an increase in the U.K.’s capital allowance threshold. “Our members say increasingly the U.K. [compared with other EU countries] is becoming less and less attractive a country to do business in,” says Steve Elliott, CIA’s CEO.

 

CIA is also frustrated that there are “hundreds of millions of pounds” in the U.K. and EU government systems set aside for training, which have yet to fully benefit the chemical industry. “Let’s devote that money to upskilling,” Elliott says.

 

CIA has access to and talks regularly with high level U.K. politicians. But there is a problem – the politicians don’t seem to be listening or are disinclined to act, Elliott says. “It is frustrating that proposals go in and not much is coming out,” he says. “There is an opportunity [for the government] to back winners here to enable the retention of intellectual property in the country.”

 

The financial performance of the U.K. chemicals industry like many other national chemical industries is struggling under current market conditions. “The first three quarters of 2008 were very good. Then it just fell off,” Elliott says.

 

Despite CIA’s call for government assistance and disappointment at the lack of positive action thus far it is not all gloom and doom at CIA. According to CIA’s economic advisor Alan Eastwood, when comparing data from previous economic recessions there is a case to be made that the U.K. chemical industry is already at the bottom of the recession and that by the third quarter of the year it will be on the way back up (see CIA chart below).

Industry can expect a 13% increase in sales in 2010, Eastwood says. “Economic recoveries are always quicker than we think they are going to be,” he adds.

 

Welcome back optimism.

Exchanging information with this CIA – and not the one based out of Langley, VA – really has to be a more enjoyable experience altogether.

 

 













 
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