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Chemicals: observers disagree about when the current growth cycle in the chemicals industry will end. (Industry Watch).

Chemicals: Observers disagree about when the current growth cycle in the chemicals industry will end. Some analysts believe the industry still has capacity to add following years of under investment. Other experts believe that new capacity in Asia and the Middle East will bring a faster end to the up cycle, noting that demand has stayed strong so far this year because of delays in bringing additional Middle East capacity online. Such uncertainty has some chemical companies investing in capabilities to improve efficiency, while other firms have pursued mergers and acquisitions (M&A). According to Young & Partners, $13 billion in deals were completed in the first half of 2006 and total annual deals could top the $33 billion in deals made in 2005. The M&A deals have either been done to increase size or to increase a company's presence in a particular area. Other companies have restructured and sold off businesses, choosing to invest in Asia. Asian companies, such as India's Dishman Pharmaceuticals and Chemicals, are also expanding by buying assets in Europe.

Source: Financial Times
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Publication:Instrument Business Outlook
Date:Sep 30, 2006
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