Landscape of the European Chemical Industry 2017

Landscape of the European Chemical Industry 2017

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Romania

Turnover

> 2 billion €

Number of companies

864

Direct employees

28,631

National contact

Romanian Chemicals Producers and Distributors Association (APDCR)

Claudiu Tuncu

President

ctuncu@dow.com

Romania

Chemical industry snapshot

Smaller, but still sizeable

Once a leading chemical producer in Eastern Europe, Romania has seen a sharp contraction in chemical output in recent decades as massive restructuring took place. In 2014 turnover of chemicals and chemicals products in Romania, at €2.22 billion, was down 8.1% year-on-year. Yet in 2013 the sector still had 864 companies employing 28,631 people.

Still restructuring

A €40 billion inflow of EU funds during 2014-2020, including €1.3 billion for the Competitiveness Operational Programme, may benefit chemical manufacturers. But the insolvency of some industry players remains a handicap: according to a Coface study, 107 chemicals and chemical products companies were insolvent in the first half of 2014, down from 249 in 2013.

Overcoming complex problems

Following the shift to free market economic policies that began in 1990, large state-owned production facilities, hampered by obsolete technology, high production costs and low productivity had to be restructured and privatized.

 

Economic contraction reduced demand for chemical products and key external markets were lost, while the remaining industry fragmented from 97 companies in 1990 to 3,500 by end-2006.

Signs of recovery

The number chemical manufacturers in Romania dipped to 824 in 2012 but then began to recover.

In 2013, Romanian had a large chemicals trade deficit. Exports were €2.79 billion but imports were nearly three times larger.

Chemical export in 2015 – first 10 partners by trade value (USD Thousand)

Romania Chemical exports 2015 ( USD thousands) based on the data available from http://wits.worldbank.org

Continuing progress

Three factors are expected to aid further improvements in chemical industry competitiveness:

  • Development of industrial clusters as part of regional development
  • Enhanced spending on Research & Development and Innovation, to meet a target 2% of GDP (1% public +1 % private funds)
  • Cohesion policy contributes not only to reduce regional disparities but also to reach the goals of competitiveness

How are we doing?

Strengths

  • A strong petrochemical base
  • Important natural resources and energy self-reliance
  • Good level of regulatory compliance (EHS/Quality)
  • Strategic location in the centre of Europe
  • FDI potential
  • A mature market – growth is export
  • EU membership
  • A hub for Central and Eastern Europe
  • Long tradition chemical production

Weaknesses

  • Lack of innovation and specialisation
  • Ageing population, and falling numbers Poorly- educated and trained labour force
  • Rising labour and energy costs
  • Heavy administrative and regulatory burden
  • Limited access to leading technologies
  • Vulnerability to imports and external shocks
  • Poor infrastructure
  • Lack of know-how
  • Inadequate links between companies and research institutions for developing new products and improving technology
  • Pressure to increase taxes and fees arising from public sector deficit

Our contribution to a competitive Europe

Top down

Economic enabling strategies have been developed, aligned to the EU’s 2020 strategy. These include a national industrial policy (SRR), export strategy, (SNE), energy resources plan, (SER), and a competitiveness and Innovation strategy (SNCI).

 

Government sets overall horizontal framework conditions across energy, research, education, and infrastructure, but these strategies are sometimes of more political than practical relevance.

Bottom up

In October 2015 the Romanian Academy launched a project, “Romania’s development strategy in the next 20 years”, that takes an interesting bottom-up approach.