WRITTEN QUESTION E-0088/98 by Carlos Robles Piquer (PPE) to the Commission (30 January 1998)

Subject: Economic and technological developments affecting the salt industry

Rapid changes in the salt market in many Member States have caused particular problems for this sector due to the drop in consumption and due to the large investments necessary to acquire technology to improve the quality of the product, this being the only means of survival.

Various factors such as the conversion of the fishing fleet, the closure of many fish preserving plants, the increasing predominance of industrial refrigeration etc. have caused the industry both to request help in order to be able to cope with the new reality facing the Community salt sector, and to complain about the scant assistance given by national governments and about the market gains of Maghrebi countries, Egypt and Israel.

Does the Commission have the necessary information on the Community salt industry, the changes affecting it and its markets, and the significant financial and job losses involved in order to enable it to put forward a basic plan of action?

Answer given by Mr Bangemann on behalf of the Commission (4 March 1998)

The Commission follows with great interest the evolution of the salt industry in the Community, and the main factors affecting its competitiveness. For this purpose, the Commission has its own data and information provided by the European salt producers association (ESPA).

The pattern of salt consumption is complex, although in general terms demand seems to be declining. Apparent consumption in the Community reached 34.2 million tonnes in 1995, including an increase of about 3.3 million tons following the accession of the new Member States.

The first user of salt is the chemical industry, and more specifically the chloralkali sector (44% of total sales in 1994). This salt is often produced in business units integrated in chemical groups. The decline in the production of chlorine-based chemicals, particularly due to the stoppage of chlorofluorocarbons (CFC) and the reduction of the demand for pulp and paper bleaching have a negative impact on salt consumption. However, polyvinyl chloride (PVC) plastics demand may continue to grow, as well as the demand for caustic soda, a co-product in brine electrolysis.

Road de-icing is the second end market for salt (21% in 1994). Demand is closely related to weather conditions and fluctuations can be important from one year to another (road salt sales in the Community in 1992 were 39% lower than in 1993). This relation makes it difficult to provide possible trends for the future.

Human food and animal feed salt constitutes the third final market in importance (14% in 1994). In spite of the relative reliability of the available statistics, the small percentage of salt used in human food suggests that the question of the decrease in the use of salt for fish preservation mentioned by the Honourable Member would have a minor impact on the total salt industry. Other uses of salt are found in the petroleum industry, textiles and softening of hard waters.

Production in the Community showed a decline in parallel with the decrease in demand. During the decade 1986-1995, the decline was over 11%, sharper in the case of France and the United Kingdom. In any case, it is noted that capacity exceeds demand by far and this situation may continue in the years to come.

The characteristic of salt in general as a bulk product, with low value-added, has a restraining impact on trade. This is reflected in the preponderance of intra-Community trade in comparison with extra-Community trade, increased with the accession in 1995 of the new Member States, great consumers of salt. As indicated by the Honourable Member, Egypt, Tunisia, Israel, Morocco and Poland are the major exporters of salt to the Community. In the period between 1992 and 1995 those countries increased their exports to the Community by 30%, but the situation is very different between them, with high increases in the case of Tunisia, Morocco and Poland, and decreases in the other cases. Again, this situation must take into account the effect on trade of the accession of Austria, Finland and Sweden. However, exports from the Community have been considerably more important than imports during the whole period (up to ten times higher in 1992, and five times higher in 1995).

Prices are closely related to the process of production and therefore to the quality of the final product, the vacuum pan salt being the most expensive. Indicators suggest lower prices in the United States for rock salt, explained by the lower mining costs and also by the effect of economies of scale.

During the period 1993-1996 employment in the salt industry has declined by around 8.5%. This is a major factor of concern for a sector that employs in Europe nearly 8 million workers. As a comparison, during the same period, the number of workers in total manufacturing in the Community declined by 4.2%. This makes the recommendations included in the Commission paper 'The competitiveness of the European industry' ((SEC(96) 2121. )) still more urgent and important in the case of the salt industry. Measures for the improvement of this important activity should continue to be taken in the framework of the general industrial competitiveness policy of the Community.