Chemicals & Pharmaceuticals
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While the industry worldwide is still reeling from the current cyclical downturn and the recent global recession, chemical companies in Europe are faced with the ongoing rise of new competition in the Middle East and Asia (especially from China and India).
Chris Stirling, Head of the Chemicals and Pharmaceuticals Sector for KPMG Europe talks about issues facing companies in the chemicals and pharmaceuticals sectors in these turbulent times.
Unlike the pharmaceutical sector, the chemical sector has much tighter margins, as cost of goods sold is a much greater proportion of the cost base. As the top line progressively comes under volume and price pressure, the intensity on cost escalates. Given current consumer confidence levels, we believe that the down-cycle will continue for at least the next 18 to 24 months.
Working capital performance continues to improve in the Chemical sector, but given more challenging economic times how much longer will this be maintained?
Contact
Christopher Stirling
KPMG LLP
1-2 Dorset Rise
London, EC4Y 8EN
United Kingdom
T +44 20 7311 8512 | christopher.stirling@kpmg.co.uk
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