New economic realities resulting from the global recession will permanently change the business landscape, a DuPont vice president told business leaders at TiO2 2009.
“Although it is difficult to predict when global economies will rebound from the current downturn, the new economic reality will force major industries to permanently change the way they operate,” said Richard Olson, vice president and general manager, DuPont Titanium Technologies at the global conference focused on the titanium dioxide industry. DuPont is the world’s largest manufacturer of titanium dioxide, a white pigment used widely in coatings, plastics and paper.
In a keynote speech at TiO2 2009, presented by Intertech Pira, Olson said during the economic downturn the titanium dioxide industry must operate more cautiously, keeping inventory at levels only sufficient to satisfy customer requirements, scrutinizing all capital expenditures and avoiding investment in new capacity without some certainty of a reasonable return.
“Longer term, the industry must emerge from the recession leaner, more in tune with customer needs, and better able to satisfy demand with just-in-time supply,” added Olson. “It may seem as though TiO2 is at the extreme end of the supply chain from consumer goods, but in tough times, when people stop buying cars, house paint and washing machines, we can suddenly find ourselves sitting on unproductive inventory. That has to change.”
The titanium dioxide industry is widely regarded as a bellwether business because it is closely tied to the construction and automotive industries, as well as a broad range of large consumer goods such as appliances.
Olson said DuPont is studying a variety of macroeconomic indicators and leading cyclical indices that can anticipate inflection points in the business cycle, including spending on infrastructure projects resulting from stimulus packages launched by many governments around the world.