November 15, 2024 14:36

In late October, Versalis unveiled a 2 billion euro restructuring plan to close basic chemical plants and invest in innovative platforms over the next five years (read more). We spoke with the company's CEO, Adriano Alfani, to understand the motivations and goals driving the plan, as well as how it addresses today's challenging market conditions.

"The basic chemicals industry in Europe is going through a profound crisis that we consider structural and now irreversible," begins Alfani. "The crisis is caused by multiple factors: the availability and high costs of raw materials and energy, the economies of scale needed to remain competitive internationally, overcapacity, and increasingly invasive regulations that impact costs and penalize European production".

Is the European chemical industry losing global competitiveness, and is this not just a temporary phenomenon?
We lack low-cost raw materials, which are available in the United States or the Middle East. The result is that ethylene produced by European crackers costs three times more than in those regions. The downstream chain cannot absorb such a cost disparity, and as a result, the entire basic chemicals sector is weakening, as evidenced by announcements of closures, rationalizations, or capacity investments outside Europe, as well as the growing import of products, which in the case of polyethylene now accounts for about 75% of demand in Italy.