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e-Business in the chemical, rubber and plastics industrydemand. 62 On the other hand, trade is not a one-way route, and rivalry in the market alsoincreases. Companies in the emerging markets are making fast progress (in terms of productionand marketing know-how) and are now targeting European markets, leveragingtheir lower production costs (mainly due to cheap labour) as a competitive advantage.CEFIC (2006, p. 2) summarises this international competitive scenario for Europeancompanies as follows: "The European chemical industry can still be portrayed as vibrantand strong. However, worldwide competition is getting fiercer." This can be demonstratedby comparing current world-wide sales figures with growth rates.The EU chemical industry is the worldleader with total sales of €476bn (in 2006).For comparison, sales of companies in theNAFTA area are estimated at €417bn,those of Japanese firms at €146bn. In acountry ranking, China occupied third placein worldwide chemical sales and Indiaranked ninth, so both are among theworld’s 10 largest chemical producers(CEFIC 2006, see Exhibit 2.3-1).However, as in most industries, productionin the emerging economies, notably theAsian-Pacific and Latin American markets,has experienced enormous growth sincethe late 1990s. Annual production in Asiahas increased by more than 70% between1994 and 2007, compared to about 20% inthe EU (see Exhibit 2.3-2).Exhibit 2.3-1: Geographic breakdown ofworld chemicals sales in € bn (2005)83 32Other231476Latin Am.EU 25Other Asia146 JapanChinaOtherEurope87169USA417(excludes pharmaceuticals)Source: CEFIC (2007), Table Report,Table 1.1Exhibit 2.3-2: Growth in chemicals production – production index 1994-2005 (1994 = 100)180170160150140130EUNorth AmericaAsia PacificLatin America1201101001994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Source: Developed from CEFIC (2006)Thus, new market opportunities and rising competitive pressure exist in parallel.Depending on the sub-sector and the positioning of the individual company, either of thetwo can prevail. On the whole, the short and medium-term outlook for the European CRP62In the EU chemical industry, for instance, domestic sales have been stable since 1995 (seeCEFIC 2006, p. 6), thus steadily decreasing in importance as % of total sales.35