IHS Chemical Week


ACC Meeting: Reacting to Change

9:12 AM MDT | June 12, 2009 | By ROB WESTERVELT

The ongoing impact of the global economic slowdown and a more aggressive policy agenda topped discussions at ACC’s annual meeting, held this week at Colorado Springs, CO. Dramatic changes since last year’s meeting, including the rapid onset of global recession and the 2008 elections in the U.S. have created intense market and regulatory challenges for chemical makers.
The mood at the meeting was generally subdued, but most executives agreed that chemical demand hit bottom in most regions in early 2009 and that a slow climb to recovery has begun. They expect conditions to remain volatile, but say their fear that a further or follow-on demand collapse, akin to what was happened in late 2008, has diminished. Asia, with the notable exception of Japan, appears to be leading the way to recovery, and European demand remains weak.
“There is slow progress, but it’s not great,” says Eastman Chemical chairman Brian Ferguson. The first quarter was a “disaster” with a slight improvement since March, Ferguson says. “It’s better than it was, but still not good,” Ferguson says. Visibility remains impaired, and inventory has been worked down with customers placing orders with “very short lead times,” he says. Customers relay only their immediate needs, which makes it “very hard to give an idea of order patterns going forward,” he adds.
Dow Corning president and CEO Stephanie Burns echoed those comments. Some sectors, including automotive and construction, continue to struggle, Burns says. “Electronics has been slow to come back,” she says. “It is my personal view that we haven’t seen the most negative [impact in construction hit] yet, which is the lack of new projects being started. Overall, we’re still very cautious at this point.”
The downturn hits as chemical makers face the most aggressive regulatory environment in decades. ACC will scale back the broader public outreach element of its essential2 campaign, ending the national cable and print advertising campaign for essential2, in favor of targeted support for ACC’s key priorities. These priorities include changes to federal chemical management policy, including an overhaul of the Toxic Substances Control Act; climate change policy and the impact it could have on energy supply; rail reform; and chemical plant security. Communications spending will be cut from about $20 million/year, to $12 million/year, ACC says.
“We are redirecting our communications strategy to be much more focused on supporting our priority advocacy issues,” says ACC president Cal Dooley. “We will continue to deliver a message about the contributions our industry makes, but we will target that so that it is complementing our policy agenda.”

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