New deadline for EU registration

Chemical manufacturers and exporters in the GCC have until November 30 to get their products registered with the European Chemical Agency (Echa) for mandatory compliance with the registration, evaluation, authorisation and restriction of chemicals (Reach) programme to access the European market.

Gulsan Saracoglu, Environmental Engineer at Reach Global Services, said many chemical companies in the region engaged in manufacturing and export of one tonne or more of chemicals per year to the European Union countries have missed the Echa registration deadline of December 1, 2008.

They now have until the end of November to get their pre-registration formalities completed with the Echa.

He said chemical companies from the GCC, Iran, India, China and other Asian countries have to register their products for entry to the European market. Most of these companies in the UAE, Saudi Arabia, Kuwait and other regional countries are yet to register.

Saracoglu said multinational firms such as Procter and Gamble, Unilever, or pharmaceutical companies with manufacturing facilities in the region, will have to get their products registered by parent companies or factories in Europe. Some pharmaceutical products are exempt from Reach.

The cost of registering each product with the Echa is €50,000 (Dh255,700), Saracoglu said, and the expenditure incurred by companies registering around 30,000 chemical products used in various sectors would push up chemical prices in the market.

According to Gulf Petrochemicals and Chemicals Association, about 45 per cent of the GCC's chemical and petrochemical exports are to Asian countries and around 14 per cent to the EU.

Members associated with the Dubai-based GPCA have partially completed the registration process. Sources said major Gulf chemical and petrochemical exporters to Europe are planning joint registration of some chemicals produced here to reduce the cost.

"Joint registration has helped Gulf manufacturers share the high cost of registration," said an official. The main export markets for the GPCA member companies are India and China, but the US and Europe are major markets that the local manufacturers cannot ignore. According to the European Union Trade figures, chemical exports from the UAE to the EU amounted to €328 million in 2007 and the volume of GCC chemical export to the EU is relatively big.

Several big chemical and petrochemical projects are under development in the UAE. "Registration of some chemical and petrochemical products, which are not exported to Europe in bulk quantity, is neglected by local manufacturers, because the investment needed to register those products do not match the business volume," the official said. The export of chemical products not registered under Reach will be illegal and the European importer will have to pay a huge fine.

About $29 billion (Dh106.4bn) has invested in the GCC's petrochemical sector and most of the new production is for the export market. The association has been working with Reach consultants to encourage its members to comply with the requirements.

According to Reach, about 30,000 chemicals used in industrial processes, cleaning products – soaps, detergents, shampoos, toothpaste – furniture, electrical appliances and hygiene products would have to be registered. The European Commission has estimated that complying with Reach will cost the chemical industry between €2.8bn and €5.2bn over 11 years. Some estimates put the figure as high as €12.8bn. The cost will be borne by the importer or producer who will pass on the cost to end-users.

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