Slay the Dragon

     While the climate of the U.S. chemical industry is now improving, several black clouds remain on the horizon. A major one is the likely need to compete with the “China price.” This is the price at which Chinese producers can supply materials. It usually is significantly below the current manufacturing cost of most American or European plants.

     With stiff foreign competition and declining margins, some poorly performing U.S. manufacturers are, or soon will be, nearing a crisis situation. Many of them, seeking to be “lean” rather than efficient, have already slashed costs and weakened their manufacturing organizations. They may now feel that they have no alternative but to follow the herd, closing domestic facilities and transferring manufacturing capacity to the third world.