Crisis Hits Greek Chemical Demand

The ongoing financial turmoil in Greece has had a negative effect on demand for chemicals, Vasilis Gounaris, vice president of the Hellenic Association of Chemical Industries (HACI) and vice president of BASF Greece, told the London-based chemical news service ICIS.

In 2014, demand was at the same level as 2013 and showing signs of recovery. The problems that arose after that – rooted in the banking system – subsequently crushed it, Gounaris said, noting that restrictions on Greek banks are a drag on the industry’s import-dependent, mostly small- and medium-sized companies with combined annual turnover of €2 billion and about 17,000 employees.

Partially offsetting the negative impact of the bank closures that have affected cash flows, the executive noted that chemical companies “have had a long tradition of reliable transactions.” He acknowledged, however, that “some companies are well prepared to deal with capital controls, while others face at least short-term problems.”

Greek chemical companies look forward to the implementation of reforms that will “enable them to operate on a level playing field,” Gounaris remarked. When banking restrictions are lifted, he believes the markets will be able to recover – especially if the political situation stabilizes and Greece continues on a “European course.” He conceded, however, that business is likely to continue pointing downward into the first half of 2016.