Despite industrial production rebounding from Covid-19, the chemical sector is struggling to get back to peak health.
The industry got through the worst of the pandemic and the hurricanes that hit the U.S. Gulf Coast, yet specialty chemical companies still can’t get their hands on sufficient supplies of vital raw materials. In the case of PPG Industries, maker of the Glidden paint brand, the problem has been exacerbated by suppliers of epoxy resins and acrylic acid putting off maintenance projects at their plants.
“They are clearly hampered this year because I think during the pandemic they didn’t do the required maintenance, they postponed some things, and they got caught short by the recovery,” PPG Chief Executive Officer Michael McGarry said on a call. “As they postponed maintenance, or underspent, that has impacted their ability to deliver what we wanted.”
The U.S. was the hardest hit, but the fallout from disrupted supply chains extends to Europe. In China, the sector has been impacted by a dual control policy that’s led to shortages and higher prices as manufacturers lowered output to meet energy consumption targets.
McGarry said he expects the situation in the U.S. to improve as suppliers resume spending on maintenance and improvements.
“Obviously, they are all making very good money right now and they are all interested in getting reliability up at or above where they were in 2019, so I anticipate this will get better,” McGarry said.