Why 2016 Will be Tough but Survivable for Coatings Suppliers
The Coatings Group spoke with Dr. Thazyasseril Vijayan, Managing Director of Anichem FZCO, one of the UAE’s biggest chemical suppliers. After 37 years in the sector he offers his view of 2016 as the industry prepares for the Middle East Coatings Show in Dubai.
Dr. Vijayan’s organization has grown into a diversified group of companies involved in chemical trading, manufacturing, logistics and bulk terminal storage.
He puts forward the two main challenges for all coatings companies in 2016. The first is the increased need to meet sustainable and green production requirements. “A major challenge for the industry this year is to find more sustainable and environmentally friendly products to be incorporated into the existing line of finished products and raw materials,” says Vijayan.
“We need to ensure they are economically feasible and commercially viable to ensure successful transition. The challenge is an ongoing one and our industry has spent a lot of resources over the years to improve the situation. However, with the recent UN Climate Summit, our commitment to improve has been reinforced.”
Vijayan believes support from the government authorities in implementing guidelines to enforce the green products is also paramount.
He says, “the coatings industry and the government bodies have to work hand in hand. Only if the relevant government authorities make new regulations that make the consultants approve only environmentally friendly/green products will there be a significant improvement in the current situation.
“If this does not happen, environmentally friendly manufacturers who come up with innovative products will struggle to reap benefits when competing with others. The regulatory bodies should work with the industry to set up strict guidelines through the consultants.”
Dr. Vijayan believes that for suppliers, the United Arab Emirates remains the key country in the region for successful business.
“The UAEeconomy has been resilient to the volatility caused by the drop in crude oil price. The number of projects awarded and being completed is an incredibly positive sign for the industry.”
He goes on to say, “the non-oil economy has performed far better than expected. After the UAE, the Kingdom of Saudi Arabia still holds many opportunities for our business to grow despite budgetary cuts in the nation.”
He warned that this year the coatings industry should avoid being aggressive and should settle for low-moderate risk.
“Middle Eastern nations have announced cuts on government spending for 2016 in light of the instability of crude oil prices,” he says.
“The price of crude oil affects almost all industries and sectors. Organizations in the coatings industry must be more prudent in addressing the complexities that arise due to such volatilities.’’
“However economies such as the UAE and Qatar have been resilient in 2015 and have handled the situation well. Opportunities continue to rise with new projects being announced and with the work being done in record time to complete existing projects.”
Oil prices, which plummeted in 2015, will continue to be unstable in 2016, says Vijayan meaning the prices of solvents and other feedstock will continue to be volatile this year.
“Thevolatility in crude oil prices will continue from 2015 to 2016. It will be a challenge to address the continued volatility in the pricing of solvents and other feedstocks for our industry.”
He concludes by saying, “Shale oil production, removal of sanctions in Iran and other geopolitical instability in the region will continue to make the coming months dynamic and unpredictable.”
“These factors will indirectly affect the price of our feedstock and raw materials making budgetary forecasts difficult.”
For more information, contact firstname.lastname@example.org.