PAPER AND PULP CHEMICALS BOOST FINNISH CHEMICAL INDUSTRY
01.04.2005

The production volume of the Finnish chemical industry increased steadily during the last few months of 2004. In contrast to the development of the rest of the Finnish manufacturing, production in the chemical industry improved also in January 2005. Still, world economic growth might be decelerating which will dampen the demand for chemical industry products.

Improved expectations in the Finnish chemical industry

According to the Business Climate Survey, the Finnish chemical industry remains among the most optimistic sectors of the total Finnish industry. During the first few months of 2005 the expectations of the Finnish chemical industry have improved. Production in the chemical industry grew also in January 2005 unlike the rest of the Finnish manufacturing. ETLA, the leading Finnish economic research institute, gave a 2.6% production forecast for the Finnish chemical industry for 2005. Without the planned oil refinery maintenance shutdown due in the autumn, the growth rate would be close to 4%.

Basic chemicals in good demand

The production of basic chemicals grew rapidly in spring 2004, and the production remained on a high level during the rest of the year. Especially pulp and paper chemicals were in good demand due to the favourable situation in the world economy. Although the pulp and paper industry has had difficulties to successfully raise their prices, its growing volumes have given boost to basic chemicals industries. However, the possible deterioration of the economic situation in the EU would weaken the demand for pulp and paper chemicals.

Production of chemical products declined

The Finnish production of chemical products declined in year 2004 but the differences between the sub-sectors were wide. Production in the paints and colouring materials industry increased rapidly. Building construction and renovating increased which boosted the demand for paints. The development of domestic demand remained smooth in printing inks. Exports of paints and printing inks are still growing rapidly, especially to the Baltic countries and Russia.

Recovery in plastic products industry

The production level in the Finnish plastic products industry was very low during the first months of 2004. After that the production volume has been increasing almost continuously. The strong component demand in the telecommunication equipment industry pulled up the plastic products industry. Demand for plastic products in building construction will continue to grow. Retail trade, which is an important customer of plastic packaging materials industry is still growing rapidly.

The outlook is based on the material of the Finnish Outlook dated March 21st 2005.

Further information:
Chemical Industry Federation of Finland
Mr Kari Teppola,
Tel. +358 9 1728 4315,
kari.teppola@plastics.fi

Mr Pasi Ahde,
Tel. +358 9 1728 4307,
pasi.ahde@chemind.fi

www.chemind.fi

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