The industriAll Europe chemical and pharmaceutical sectoral network met on 13 December.

Participants expressed deep concerns about the impact that high energy prices have on the industries. These impacts have started to show in the form of that have started to show decreased or interrupted production, and in some cases, complete closures affecting value chains across sectors. The shutting down of Mitsubishi in the UK, for example, is felt in the chemical industry, with job losses expected. 

If Europe does not succeed in lowering energy prices, trade unionists fear that an ever larger part of production will relocate to other continents. The United States is one possible destination for relocation due to its lower prices, as well as the Inflation Reduction Act. 

However, there are more reasons for companies to relocate. BASF, for example, is building one of its biggest sites in China at the moment, in order to be close to this important market. At the same time, they have announced a savings programme of 500 million Euro each in 2023 and 2024. That will certainly mean job cuts, mainly in Germany.

General Secretary of industriAll Europe, Luc Triangle, comments:

“Proximity to other markets, namely China, has been a driver of investment decisions for years. We have recently seen an acceleration of this. BASF is just one example. We have to be vigilant about what this will mean for SMEs and their workers in the supply chain.”

The network also looked at the pharmaceutical sector and the investment and divestment decisions of its driving companies. Several countries are currently facing medicine shortages. This is not only due to the logistical problems of obtaining medicines and a lack of raw materials, but also due to marketing decisions made by companies. One example of this is in Portugal, where since the Portuguese government lowered the prices of certain pharmaceuticals, companies have diverted some of their supply to other countries where they can obtain a higher profit.

The chemical and pharmaceutical network has pledged to closely monitor such investment and divestment decisions and their impact on workers and societies.