Press release
26th October 2006

Downturn at hand in world economy, still good prospects in Finnish chemical industry

CHEMICAL INDUSTRY FEDERATION OF FINLAND

Production in the Finnish chemical industry increased during the seven first months of 2006 by 2.5%. The differences between sub-sectors were remarkable. Chemical industry has quite good prospects although the world economy is slowing down, claims The Economic Outlook of the Finnish chemical industry.

Production of basic chemicals increasing

The two-month labour dispute in the Finnish pulp and paper industry in May-June 2005 did not have as dramatic an effect on the Finnish production of basic chemicals as one might have expected. When there was no domestic demand for pulp and paper chemicals, the chemical producers succeeded in increasing the exports of their products.

The Finnish production of basic chemicals has been increasing remarkably during the first half of 2006 as a result of increased demand of paper. The demand for paper is growing slowly in Europe which will keep the market situation of the basic chemicals challenging.

The strongest growth in paint exports to Russia over?

The Finnish production of chemical products has been increasing recently. Part of the demand behind this growth comes from the pulp and paper industry which, in addition to basic chemicals, uses also specialty chemicals in its production processes.

The Finnish building construction is still growing, which will keep the demand for Finnish paints at a good level. Russia has been an important market for Finnish paints and colouring materials for years but now it seems that the strongest growth may be over. Still, many Finnish paint producers have production also in Russia. They will probably gain from the increasing demand for paints by supplementing the Russian production with Finnish products.

Stable demand for plastic products

Continuing growth in the Fin nish building construction is expected to keep the demand for plastic construction materials at a satisfactory level. On the other hand, production in Finnish food industry has not developed favourably lately, which has direct influence on Finnish plastic packaging producers.

Imported consumer goods are increasing their market share which is another negative factor for the Finnish plastic packaging industry. It is unclear whether the Finnish production of plastics components for electronics industry will be able to gain from the expected growth of electronics industry in 2006 and 2007.

The outlook is based on the material of the Finnish Outlook dated September 26th, 2006.

The Finnish chemical industry covers chemicals, chemical products, petroleum and coal products, rubber products and plastic products.

Further information:
Chemical Industry Federation of Finland
www.chemind.fi/pressreleases
Director Kari Teppola, tel. +358 9 1728 4315, kari.teppola@plastics.fi
Economist Pasi Ahde, tel. +358 9 1728 4307, pasi.ahde@chemind.fi

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