LEIDSCHENDAM, 07/09/06 - The Dutch chemicals industry has chalked up a strong first half. Unlike last year, sales growth was to a large extent achieved by higher production, according to figures published yesterday by industry association VNCI.

Chemicals, the biggest sector in Dutch industry after food, achieved first-half sales growth of 14 percent from the same period last year. Production expanded by 6 percent, while selling prices up over 7 percent. The production increase was mainly in basic chemicals (up 9 percent) and to a lesser degree in chemical end-products (up 1.5 percent).

Rein Willems, director of Shell Nederland and chairman of VNCI, expects the positive trend in the chemicals sector to continue in the second half. The association is now forecasting 11 percent sales growth, where at the beginning of the year it was projecting sales growth of at least 6 percent.

VNCI does note that companies are facing increasing difficulty in passing on high raw materials prices to their clients. "Although the picture for the total sector looks good, some companies are experiencing great difficulties in remaining in the black."

Chemical sales in the full 2005 year grew by 9 percent to 40 billion euros, wholly reflecting an increase in selling prices. Production volume stagnated at the same level as in 2004.