EU plastics group warns about damaging effect of force majeure declarations

April 02, 2015

According to a recent statement from the Brussels-based European Plastics Converters Association (EuPC), the recent series of force majeure declarations by some of the leading polymer suppliers to the European market could have very damaging effects.

"We are receiving reports from our major national associations that compounders and processors are experiencing difficulty in obtaining adequate supplies of polymer to discharge contractual obligations toward their customers," said Alexandre Dangis, EuPC's Managing Director.

He went on: "This is particularly damaging at a time when many EU states are trying to claw their way back to recovery and, in particular, when the EU plastics industry is in such a great position to be in the vanguard of growth with its potential to deliver customers and broader society carbon savings and resource efficiencies."

"I am afraid," he added, "that the force majeure could well lead to processing companies departing the EU to re-establish themselves in Asia where, on the face of it, a more favorable polymer supply situation persists."

"Of course," Dangis continued, "shortages spell out increases in polymer prices, which will need to be passed on down the customer chain. For plastics packaging manufacturers, as an example, the raw material component accounts for as much as 60% of the selling price of a pack. If increases on this cannot be passed on, it places the very viability of the manufacturing companies at serious risk."

EuPC is the leading EU-level trade association representing European plastics converters. EuPC now totals 51 national and European industry associations; it represents close to 50,000 companies, producing over 45 million metric tons of plastic products every year.

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