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Kyohei Takahashi on the way ahead for Japan's petrochemicals industry

JPCA Chairman and Chairman of Showa Denko, Kyohei Takahashi, talks to Platts about petchems, power and psychology

May 26, 2011 - This year's Asia Petrochemical Industry Conference takes place in extraordinary circumstances. It was long planned for late May in Japan. Then disaster struck on March 11 with the magnitude 9.0 earthquake, devastating tsunami and resulting -- and continuing -- nuclear crisis.

But while the country was hit by its biggest human tragedy in recent modern history, the Japan Petrochemical Association decided not to cancel APIC 2011, but to move ahead with it, its goals only reinforced by the chain of disasters.

"We want to make this event a big success," says JPCA Chairman and Chairman of the board of directors of Showa Denko KK, Kyohei Takahashi.

The theme of APIC 2011 is "Realizing New Opportunities through Petrochemistry," which was already decided before the disasters this year, Takahashi said.

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Look out for Platts Horizon -- Asia Petrochemical Outlook 2011
Also in this issue:
Rebooting the Economy: The reconstruction effort also offers a giant boost to the industry
Shock to the System: Rethinking global business practices, from site centralization to JIT supply
▪ The promise of ASEAN-China free trade

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By choosing this theme, the JPCA wanted to reflect that the world is "changing and changing," and that instead of fighting for each others share in existing markets, the way to go for especially Japanese and other Asian petrochemical producers is to grab opportunities by developing new products.

"We deliberately said 'petrochemistry' not 'petrochemicals' to reflect that feeling of the need for continuing development of new value-added products," Takahashi explained, noting that already the petrochemical industry of 20-30 years ago was a very different animal from what it is now.

"We need to keep on changing that." In innovation and developing new products for electronics, IT-related products, lightweight products for automobiles, the Japanese petrochemicals industry has been heading this way already and is at the cutting edge in many fields. It will need increasingly to move in this direction, Takahashi said.

Leaning on China

Takahashi was predicting an unstable year ahead although he expects China to continue supporting global demand.

"China seems to be the only country right now pulling up the global economy, and I don't see that changing," Takahashi said.

But in China too the economic outlook is less rosy than before as the Chinese government needs to keep inflation under control, while at the same time maintaining steady economic growth.

"The government there sees that the economy has been overheating and is trying to cool that down, although it cannot afford to let the economy cool off too much. But the worry is that nobody else than China seems to be able to pull up global demand." "If China grows by 10% for three years in a row, that growth will be equivalent to Japan's total demand, therefore I am not worried about demand in Asia," he noted.

However, there are problems galore in other parts of the world, which are seen as potentially threatening to economic growth and petrochemicals demand.

"Currently there are so many unstable factors such as the EU [sovereign financial straits] while the US is also unstable with political deadlocks that could last until the presidential elections [in November next year], but the biggest destabilizer in the world at the moment is the Middle East [and North Africa]," he said.

"Revolutions by the people are not easily suppressed and we can expect that the region will remain unstable for the foreseeable future. This will take time and can spread to other countries as well."

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