Brenntag CEO Christian Kohlpaintner is concerned about the difficult situation in the global chemicals industry. „I've been in the business for 32 years now and I have never before experienced such a long downturn in the chemical cycle,“ he says in an interview. Although the manager believes that the global chemical cycle has reached its lowest point, he is concerned about developments on the old continent:

„We have the most difficult environment in Europe – we have massive, uncompetitive overcapacity here,“ states the head of the world's largest chemical logistics company, adding that something needs to be done in terms of consolidation, in order to continue to bring forth competitive players.

The classic cyclical movement, in which prices rise again a few quarters after demand has stabilised, will probably not take place in Europe. In addition to economic problems, structural problems are also playing a role. „This makes the region very vulnerable at the moment,“ Kohlpaintner notes, pointing to the energy-intensive value chains in which Europeans have significant cost disadvantages.

Although China has also created huge overcapacity, the situation there is not quite as bleak. Due to a lack of domestic demand, more is simply being exported. „In the future, this will push additional exports to Europe in particular, because the Americans will protect themselves with tariffs,“ Kohlpaintner predicts.

However, unlike in the steel industry, for example, the Brenntag boss sees no signs that the Chinese government is subsidising chemical exports. „You have to recognise that some Chinese chemical companies are very well positioned,“ he says. „The same applies to the automotive industry, for example. When travelling in China, you get the impression that we have overslept a lot here.“

Nonetheless Kohlpaintner, who has a chemistry doctorate, is far from predicting the end of the European chemicals industry: „The industry has always responded to the pressure on industrial chemicals with innovations and specialisation. It will do the same this time," he says.

But the industry is facing major challenges. In addition to the restructuring of capacities, this also includes the regrouping of portfolios. „We have numerous chemical companies in Europe that I don't consider to be competitive in the long term in their current size,“ says Kohlpaintner. The Brenntag CEO believes that North America has the best regional prospects. This is „the region that will be very successful in the chemicals sector in the next decade“, he believes.