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ENV GLOBAL FORUM OCT 2016 - Session 4 - Rafael Cayuela

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ENV GLOBAL FORUM OCT 2016 - Session 4 - Rafael Cayuela
"AN INDUSTRY PERSPECTIVE:THE CHEMICAL INDUSTRY"

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ENV GLOBAL FORUM OCT 2016 - Session 4 - Rafael Cayuela

  1. 1. AN INDUSTRY PERSPECTIVE : THE CHEMICAL INDUSTRY EUROPEAN BUSINESS CASE OECD ENVIRONMENT AND GROWTH FORUM OECD PARIS, FRANCE NOVEMBER 25TH Corporate Strategy Chief Economist Rafael Cayuela © 2016 The Dow Chemical Company All rights reserved. This communication is DOW CONFIDENTIAL. The content of this communication is intended for Dow internal use only. Any other dissemination is a violation of Dow Policy.
  2. 2. The Chemical Industry : “A Growing Industry” October 2016 2 Source : Dow Chemical, CEFIC, ACC, McKinsey North America Europe China Rest of Asia Middle East Rest World CAGR Percent 4.% p.a. Global Chemical Industry Capacity Growth Million Tons (2000-2014) -0.1% 0.0% 14.3% 3.2% 10% 2.0% The Dow Chemical Company - Confidential
  3. 3. Business Case: “European Chemical Industry” 3 Source : Dow Chemical, CEFIC, ACC, McKinsey World GDP Evolution 2000-14 North America Europe China Rest of Asia Middle East Rest World Chemical Industry Growth 2000-14 Why? October 2016The Dow Chemical Company - Confidential
  4. 4. 1)Feedstock Cost : Similar Until NAA Shale Revolution 200 400 600 800 1000 1200 1400 1600 1800 0 0 20 40 60 80 160100 120 140 Middle East North America China Western Europe South East Asia North East Asia Central Europe Global Ethylene Cash Cost of Regional Steam Crackers – 2000 vs. 2014 EthyleneCashCost $USPerMetricTone Million Tones of EthyleneCash Cost in 2000 Crude Oil WTI at $US 30 Cash Cost in 2014 Crude Oil WTI at $US 93 EU / NAA vs. China Ethylene Cash Cost Source : ICIS 4October 2016The Dow Chemical Company - Confidential
  5. 5. 2)Energy Cost : “Shale Revolution – NAA vs. Rest” The Dow Chemical Company - Confidential Source : OECD Shale Revolution October 2016 5 80%
  6. 6. 3)Productivity: Higher Labor Cost Offset by Productivity October 2016 6The Dow Chemical Company - Confidential
  7. 7. 4) Regulatory Cost : Doubled Since 2004 The Dow Chemical Company - Confidential October 2016 5
  8. 8. 5) Efficiency & Emissions: Outperforming The Dow Chemical Company - Confidential October 2016 6 -22% +78% +78% -60%
  9. 9. 6) Competitiveness: “Export Champion” October 2016016 8The Dow Chemical Company - Confidential
  10. 10. Thanks for your attention October 2016
  11. 11. June 2016 11

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