Next Meeting: March 2009 Reserve Now
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Date: Thursday, March 5th, 2009
Speaker: Michael J. Kratochwill, Vice President, Strategy & Finance Practice, Nexant / Chem Systems on
“The 2009 Energy and Petrochemical Outlook” Download announcement
Place: Club Quarters, 40 West 45th Street, NYC (212) 626-9300
Times & Fees: • 11:30 a.m. Cocktails • 12 noon Luncheon
• 1:15 p.m. Presentation
Fees: $45 for Members who reserve by Tuesday, March 3rd.
$55 for Guests and Members (at door without reservations)
To Reserve: Please reserve early to be eligible for the discount price. We now accept all major credit cards via PayPal, or call Vista Marketing at (917) 684-1659, or via E-mail to cmegroup@mac.com
Details on March meeting - The Outlook for the Petrochemical Industry in a Time of Wrenching Uncertainty
The petrochemical industry and the global economy have undergone wrenching volatility and shifts in near term dynamics over the last few years. Until mid-2008 it appeared that the downturn in the housing industry and related problems with financial institutions would be largely confined to North America. As those problems intensified and worked through the interrelated global economy and financial structure, Europe and then Asia began having severe problems. It appears we are now in the aftermath of an unprecedented global credit binge and a similar and perhaps interrelated commodity price boom and bust.
Oh, for the good old days when it was only tulips, whale oil or petroleum! While volatile and rising feedstock prices were the primary broad challenge facing the chemical industry in 2007 and early 2008, even more fundamental concerns are now of utmost importance:
• What is the base level of global and regional demand in the postcredit binge era?
• What prices should one use for economic and project decisions when recent years have seen crude oil rise from the US$20/barrel range of the 1990s to a peak of almost $150 in 2008 just a scant 5 months before plunging to well below $50?
In petrochemicals, the main concern of the industry had recently been to meet growing global demand without exposureto regions with uncompetitive feedstock prices. That concern has now withered under the duress of the dramatic global de-stocking of inventories and supply chains, both in petrochemicals and downstream. Combined with the present retail-level slowness of the housing, automotive and manufacturing sectors, there is no confidence on present, much less future, demand. Part of this is GDP related, but there is also a great fear that knowledge of the industry structure and supply-demand basics have become suddenly and completely in doubt.
To develop a realistic industry outlook requires addressing key issues such as the outlook for China and India, the anticipated stabilization and growth resumption in the large developed economies, and the role of governments and regulators in the global financial industry in the brave new world in which we find ourselves. Despite all these challenges, in this presentation we will endeavor to provide our own personal opinions and Nexant’s latest thoughts on the most likely outlook for the petrochemical industry.
CM&E March Speaker: Michael J. Kratochwill, Vice President / Finance & Strategy Practice, Nexant, Inc.
Mr. Kratochwill directs the Finance & Strategy Practice within Nexant’s Energy & Chemicals business unit. This practice has responsibility for financially related work in the Americas and East Asia, and has advised on many of the significant transactions in those regions. With 40 years of industry experience, Mike is a recognized expert on the
chemical and energy industries with respect to plant and business values, technologies and strategies. His areas of interest and Practice include fair market valuations and appraisals, chemical and refining economics and strategies, M&A due diligence, project feasibility, and techno-financial analysis. Mike is an experienced consultant and also has direct hands-on experience in banking and refining/chemical engineering and operations. In addition to analyzing the feasibility and economics of over $75 billion worth of projects and valuing over 125 plants/businesses, Mike has personally visited/inspected over 250 refineries, chemical plants and other energy facilities worldwide.
Before joining Chem Systems in 1991, Mike had been a Vice President in the Energy and Chemical Banking Group at Continental Bank (Illinois), and before that a Senior Analyst/Senior Process Engineer at Atlantic Richfield Company and ARCO Chemical Company. His additional work experience includes Cities Service Refining Company, Sun Oil Company and Great Canadian Oil Sands. Mike received his B.S. in Chemical Engineering (cum laude) from Drexel University and his MBA (magna cum laude) from Widener University. He is also an honor graduate of the US Army (Reserve) – Chemical/CBR School, Engineer School, and Command & General Staff College, and is a member of the American Institute of Chemical Engineers and the Society of Petroleum Engineers.
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