Geopolitics having ‘unprecedented’ impact on industry
Both the European Polycarbonate Sheet Extruders (EPSE) and VDMA have expressed considerable concerns that the ongoing Russian invasion of Ukraine and resulting energy crisis has impacted the industries on an unprecedented economic level.
Add to this a raft of raw material shortages and high fluctuations as a result of the Coronavirus pandemic, prices are drastically increasing and EPSE members, particularly, are facing soaring packaging and energy costs.
Furthermore, the industry warns of long-lasting transportation problems due to drastic price increases and reduced capacities as the shortage of truck drivers is aggravated.
EPSE President Laurence Martin said: "The current European energy cost crisis is having multiple knock-on effects for sheet extruders as the price of resin continues to rise, placing additional pressure on manufacturers who are experiencing additional increasing costs on energy, packaging and transport.
"This scale of the cost inflation is unprecedented within the industry and while EPSE, as a trade organisation, is unable to mitigate the impact on individual member companies, it can help the industry to communicate accurate information to the marketplace. By helping sheet users to make informed decisions about their own commercial actions they can reduce contractual risks to their own business. “
Elsewhere, the VDMA has recorded a 27 per cent decline in plastics and rubber machinery orders compared to Q1 of last year, and a turnover growth of just three per cent compared to the same period, when demand in the packaging and medical sectors was high. Contributing factors to this is the materials shortage, the Russia-Ukraine conflict and the zero-covid policy being enforced in China.
Thorsten Kühmann, Managing Director of the VDMA Plastics and Rubber Machinery Association, explained: “Due to the ongoing developments on the procurement market, we only expect a sideways movement or, in the best case, a slight increase in turnover for 2022 – despite full order books. We expect a development of 0-2 per cent.”
A perfect storm is accumulating and making it difficult for trade association members to absorb, as a European Commission press release confirmed: ‘The new geopolitical and energy market reality requires us to drastically accelerate the clean energy transition and increase Europe's energy independence from unreliable suppliers and volatile fossil fuels.
‘Following the invasion of Ukraine, the case for a rapid clean energy transition has never been stronger and clearer.’
Commission President Ursula von der Leyen said: “We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition.”