Leading figures in the chemical market are increasingly concerned about being able to continue production in the UK as the energy crisis deepens and Brexit chokes off the supply chain. Stephen Elliott, chief executive of the Chemical Industry Association, inferred that some of their members could begin closing plants within weeks.
The consequences are becoming increasingly apparent. E.coli has already been detected in water supplies as the government advises water firms to reduce the number of chemicals used. Prolonged shutdowns of domestic production could ripple through the wider economy, including food and medicine sectors, as industries struggle with the scarcity of supply.
While UK consumers are, temporarily at least, insulated from soaring energy prices, businesses are not and the energy-intensive nature of chemical production leaves the UK market ill-equipped to absorb rocketing energy costs. New research from Plimsoll shows how little scope there is to continue profitable production in the face of cost inflation on such an unprecedented scale.
The new Plimsoll Analysis has vetted the financial health and outlook of the UK’s 595 leading chemical companies. Based on the latest data, this interactive analysis of the UK market shows:
- 187 companies were rated as Danger or Caution, almost a third of the market
- Profit margins have averaged around 5% for each of the last 5 years
- Sales per employee is at a healthy level but has fallen to £355,000
- Aggregated sales over the past 2 years have failed to break above 0% but are recovering from a large pandemic induced fall
- 240 companies have seen their debt position deteriorate in the latest year
The Plimsoll Analysis provides an instant assessment of the health and sustainability of the UK’s leading chemical producers. It provides advanced warning of who is most likely to survive the supply crisis and who could fail.
For chemical companies, it provides an instant benchmark of your performance against the rest of the UK market and the insight you need to develop your strategy. For observers and suppliers in the market, it will show you which companies are in a weakened position and most at risk of failure.
The UK’s chemical production companies are right to be drawing up plans to cease production. The economic case for production in the UK is being sorely tested by a perfect storm of Brexit shortages and massive cost inflation. The Plimsoll Analysis reveals the companies most likely to be standing at the end of what could be a very difficult winter.
More information about the Plimsoll Analysis on the UK chemical market is available here.