Miguel Burdeos: "We chemical companies are concerned about energy costs in Germany"

The prospects of a rise in the price of supplies is giving a somersault to the costs of the Valencian chemical sector, since "they were far from foreseeable".

20 September 2022 Tuesday 19:37
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Miguel Burdeos: "We chemical companies are concerned about energy costs in Germany"

The prospects of a rise in the price of supplies is giving a somersault to the costs of the Valencian chemical sector, since "they were far from foreseeable". The analysis of how the energy crisis is affecting this business sector of the Valencian economy is made by the president of the Chemical and Environmental Association of the Chemical Sector of the Valencian Community (QUIMACOVA), Miguel Burdeos, in turn president of the SPB company.

In this context, chemical companies -600 registered companies with 15,500 direct jobs in the Valencian Community- accuse greater spending on the electricity bill, but above all a clear increase in the cost of supplies, which especially affects raw materials.

Let's talk about energy dependence. We know that the bill is overflowing. How does it affect the chemical industry? Is its impact as much as in the tile sector?

I would say that it is not as serious as in ceramics, but in basic chemistry, the one that produces the raw materials, it is also very important.

And what measures is the sector taking right now to adjust to this situation? The costs are not what they expected at the beginning of the year.

Of course, of course, the energy projections were not predictable. We also believe that Europe's intervention is going to be essential for the stabilization of the sectors, but the uncertainty is great because there are not yet, or we do not yet see, concrete measures to stabilize the energy sector.

This industry is highly dependent on Germany for supplies. What situation are they in now?

In Germany there is a lot of basic chemical industry and the energy costs in Germany are very worrying right now, they are even higher than here, and if they supply us, the impact comes from there. The impact is no longer due to the current costs we have, but due to the impact on the supply and prices of raw materials.

The chemical industry greatly increased sales, and therefore production, during the pandemic: hydroalcoholic gels, sanitizers, disinfectants... How has this transition from the pandemic to the crisis due to the war in Ukraine been?

The consumption of hygiene and disinfection products, logically increased as a result of the pandemic, is already somewhat stabilized and we are more calm, the Covid effect has nothing to do in 2022 with 2020. We greatly increased production, which We were already producing and other companies in the sector that did not make products of this type also joined, so now production has faded and consumption has also stabilized.

I meant if this situation helps you to balance the situation a little now.

Yes help. What there really is is more stabilization. When there was the problem of Covid in everything related to hygiene and disinfection materials or products, the Spanish chemical industry responded perfectly to the demand, there was no shortage. There was a bit of speculation at first in consumption, but not as it happened with other products such as respirators or masks. The imports of the Administration did not bring cleaning and hygiene products because they were available here, and even some countries like Italy demanded products from us that perhaps could not be served because they had to be supplied here in Spain. There was a perfect response capacity, which shows the strength of the chemical sector in Spain.

Inflation. It affects them as producers, but do they also fear a drop in sales? The consumer looks closely at each product that he now puts in the shopping basket.

Always when there has been a crisis -as I have been for many years, I have seen several- there is a transfer of categories and the most luxurious ones go down and the economic or essential ones increase. It is not that one or the other is eliminated, but some are increasing and people decide to buy cheaper products, so the most sophisticated suffer more. The consumption trend of the distribution brand in these crises increases and the brand of the products with the highest purchasing value, the most expensive, goes down more. But it is not something extreme either, it is a natural variation. It always happens in all the crises I've experienced, it's normal. In this way, the consumer tries to prevent the shopping basket from skyrocketing, I have seen it in all crises.

In QUIMACOVA, which you chair, they explain that yours is a very exporting sector. What effect is there on foreign markets?

In general, we depend a lot on Europe, we export a lot to France, Germany, England and we also export a lot to South America, but right now we don't see major developments or changes. This is a sector that exports 55% of production, it is highly exporting and is a consequence of being a very innovative sector. 25% of industrial innovation is carried out by the chemical sector and that gives it strength and the consequence is more stabilization in jobs and better remuneration, so we know that the strength of innovation in the sector has to continue to increase and encouraging.

Another current challenge is that of decarbonization. In October they organize in Valencia the first fair of the chemical sector to show the strategies on the environment. How does the chemical industry address the energy transition?

This fair seeks environmental solutions to products and to communicate what companies are doing in this matter, which has not started now, but has been doing so for years. It is a communicative fair. At the moment it is very, very important because the great European agreement, the Green Deal, is very demanding and although it is now a little covered up after Covid and the war, it is an issue with a lot of projection because the environmental trend that drives climate change it's key. It is a challenge, because in the next 10 years this issue will be very important at European level.



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