How can you ensure your supply chain is protected at every stage?
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Our international team of trade experts is here to help. Contact us to learn more about our coverage options for the Plastics and Chemicals Industry or request a free, no obligation quote that includes credit reports for your largest trade partners.
Plastics and Chemicals Industry
The U.S. chemicals industry faces a tough domestic environment as it was amongst the worst impacted by the energy crisis in 2022 and into 2023. Due to high inflation and rising interest rates with tight monetary policies that kept feedstock prices high, while also causing key buyer industries and consumers to cut back on spending. This weakening in demand has meant that many chemical producers have been unable to pass on higher production costs to their customers.
However, in the course of 2024 a rebound in the US and in Western Europe has gained momentum, supported by lower energy prices and recovering demand from key buyer sectors and consumers. We expect chemicals production to increase by about 3% annually in 2025 and 2026.
Plastics are extremely versatile and have in many cases replaced wood, metal and glass. More specifically, the plastics industry is the eighth largest in the United States with more than one million jobs. But increased plastic production comes at the cost of environmental stability because the materials require an incredible amount of energy to produce. Stricter regulations on waste increase compliance cost and production expenses. With increasing restrictions on single-use plastics and sustainability, restrictions are reshaping the industry to adapt to more biodegradable and recyclable goods.
Atradius can help your business stay alert for changing industry trends and help offset the risks in the supply chain.
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Atradius is here to help. Contact us to learn more about our coverage options or request a free, no obligation quote that includes credit reports for your largest trade partners.
Price fluctuations for materials can be catastrophic, especially for small companies. The prices for plastics inputs are volatile and can result in abrupt higher costs to produce end products. Atradius can help mitigate return loss with accurate market insights and financial risk analyses.
Plastic production could triple by 2050, according to the World Forum. This comes with an impact on the environment as U.S. plastic emissions are projected to surpass coal emissions by 2030. To align with more sustainable options, some companies are moving away from single-use plastics. But many fossil fuel companies see plastics production as an investment opportunity in the wake of decreased demand for non-renewables. In the wake of rising costs from global efforts to reinforce sustainable practices despite the ever-increasing demand for plastics, Atradius will be there to help you predict which customers are financially sound and which are unstable before you’re left without payment.
Plastics companies must adhere to increasingly complex environmental regulations, or risk steep fines and penalties. Adhering to these requirements costs time and money, making it increasingly important to mitigate any unforeseen loss due to poor customer credit.
As the demand for “green” products continues to grow in popularity among consumers, so does the concern for tighter regulatory policies. Consumers want the ability to trace where their products came from and the assurance that the companies making their products are sustainable too. Chemical businesses have the opportunity to capitalize on these changing consumer preferences and trends and create innovative products. The challenge will be to stay ahead of the latest standards and efforts to minimize their carbon footprint and comply with regulatory changes.
The number of non-payments and insolvencies has been low in the past couple of years in the chemicals industry. The sector also has good access to loans and funding for business operations.
Growth in specialty chemicals, green chemistry, and sustainable product is reshaping industry investments. The U.S. chemicals industry dependence on natural gas and petroleum feedstocks makes the industry vulnerable to price fluctuations.
Our business grew 25% last year, and I can confidently attribute 5% of that to Atradius.
Benefits to Credit Insurance
Trade credit insurance is a risk management tool that can help protect your company’s commercial accounts receivable from the devastating effects of loss caused by a bankruptcy or protracted default of your buyers. No company wants to face the unknown. At Atradius, we give our clients peace of mind knowing that their policy protects them from a customer’s sudden inability to pay. Especially in an industry that must adhere to high-cost environmental regulations, trade credit insurance can help with cash flow and to ensure companies are financially stable.
Atradius analyzes industry trends and the risk of every buyer to ensure you are working with stable customers. If a previously stable customer starts showing signs of deteriorating payment trends, we alert you right away so you can take steps to protect and ensure your accounts receivable. We evaluate the supply chain from each angle and can alert our clients to trouble coming down the pipeline before there is a loss.
For companies seeking to safely grow sales, working capital is essential. If your company doesn’t feel comfortable increasing existing credit lines or initiating credit lines in new markets, we can help. We are a global company with a presence on every continent. Our innovative services provide you with the practical tools you need to manage your receivables, building the foundation for solid business growth and success.
Companies in the midst of an intense growth phase may need to put up accounts receivable as capital to receive additional funds from a bank. Having a trade credit insurance policy with Atradius that mitigates your risk means banks are more comfortable loaning the funds you need.
Our policies are cost effective. On average, the rate we charge falls to less than one half of 1%. If a company sets aside a debt reserve of 5%, our services are extremely cost effective, because with our coverage you will always get any lost money back.
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Atradius is here to help. Contact us to learn more about our coverage options or request a free, no obligation quote that includes credit reports for your largest trade partners.