The Netherlands provide a favorable climate to establish a petrochemical business. Important raw materials are available or can be easily supplied, while an extensive transportation network provides access to the European markets. Furthermore, chemical research and education in the Netherlands rank among the world top. With a turnover of € 50 billion in 2008, the chemical industry plays a major role in the Dutch economy. Its positive contribution to the trade surplus in 2008 was € 17.3 billion.

Source: Agentschap NL

According to Agentschap NL, the challenges facing the Dutch petrochemicals include the high cost of feedstock due to high oil prices and the high cost of manufacturing in general due to the higher price of electricity compared to other European countries. Rising project costs are also a major concern. A recent example is Yara’s 1.3mn tonnes per annum (tpa) urea plant at Sluiskil, due for completion in 2011, which has seen projected costs rise by a third to EUR400mn.

Source:Agentschap NL

Yet, the size and integration of the Dutch petrochemicals industry enables economies of scale, which means it will sustain interest of investors in some segments where global market conditions are favourable. While Agentschap NL does not envisage new olefins and polyolefins plants in the Netherlands in the next five years, producers will focus on upgrading existing production capacities in order to enhance competitiveness with the possibility of incremental cracker capacity projects. Ethylene, PE and PP capacities are to remain static at 3.98mn tpa, 1.96mn tpa and 780,000tpa, respectively.

The Materials sector in the Netherlands is a sector with an autonomous character in that it usually produces quantities that match domestic demand. There are a few important material producers operating in the Netherlands. One of the biggest players is ThyssenKrupp. Although the company is originally of German origin it employs some 1200 workers in its Dutch facility. Its core materials operations in The Netherlands evolve around steel and stainless steel with various product propensities.

As ThyssenKrupp specializes in steel so does Aluminum Nederland specialize in the smelting, processing and technological development of aluminium. This company alone is responsible for the processing of 30.000 tons of aluminium every year. This makes it one of the biggest players in Europe. Aluminium producers from the Netherlands and Belgium converge each year to show off the latest developments in the field aluminium processing and manufacturing on the “Tradeshow Materials Engineering”.

Most of the aluminium producers in The Netherlands are members of the “Dutch Aluminium Centrum”. The organization pools the knowledge and looks out for the approximately 130 companies in the sector. To put things into perspective, these companies have a total revenue of approximately 3.5 billion euros.
The market has also been hit by the credit crisis however. The table below shows the decline in orders (per week) that has taken place since mid 2009.

Source: http://www.metaalunie.nl

Though the materials sector has had a tough period, it’s historically sound re-investment allows it to remain upright. Moreover, the strong metals consortiums maintain their ability to consolidate into a formidable and competitive front.

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