Chemists seek better supply formula

2 January 2003
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02 January 2003 | David Arminas

Improved competitiveness in the British chemicals industry, the UK's largest manufacturing sector, will rely heavily on better supply chain practices, according to the Chemicals Industries Association (CIA).

Steve Elliott, director of trade and competitiveness at the CIA, the main representative body for the industry, said companies needed to improve their supply chain performance and knowledge from chemical manufacturing through to the retail level.

His comments come as the Chemical Innovation and Growth Team, a government-industry advisory body, released its report to improve the industry's competitiveness.

The report, Enhancing the Competitiveness of the UK Chemicals Industry, recommends setting up a "chemistry leadership council" (CLC) comprising six or seven industry leaders to set priorities for the industry. The CLC will also have representatives from outside the industry, including retail, academics and the Department of Trade and Industry (DTI).

Trade organisations have voiced concern that the industry is increasingly buying material from overseas suppliers and using foreign processing plants.

Frank Hauxwell, executive secretary of the British Colour Makers Association, representing the UK's pigment manufacturers, said purchasers should reconsider using foreign suppliers to process chemicals into intermediate products such as coatings and paints.

"Supply chain managers are acutely aware of cheaper overseas prices and take advantage of this to control their cost base," he said.

"British manufacturing has to respond if it wants to survive. Our industry is being hollowed out with business going to suppliers in south and east Asia as well as eastern Europe, especially those countries about to join the European Union."

Mark Lewis, chief executive of the Process Industries Centre for Manufacturing Excellence, strongly backed the CLC.

He told SM: "It's an opportunity for better co-ordination along supply chains to reduce waste and improve the industry's image. We are in the front line of controversy because of the nature of our products. If chemical products are used improperly, then there are all kinds of environmental and health issues we must contend with."

The chemicals industry, which employs around 400,000 people, produces and sells £40 billion worth of products a year, half of which is exported.

About 70 per cent of its products are used as inputs for products and services by other industries, according to government figures.

• The full report is available at www.dti.gov.uk/cigt/competitiveness/index.htm

SMjan2003

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