Manufacturers Making Changes for REACH Compliance

February 6th, 2008

In June 2007, the Registration, Evaluation, and Authorization of Chemicals (REACH) directive, the European Union’s (EU) environmental testing law, went into effect.

REACH will change entire product lines and pricing scenarios. It will also change how companies monitor the chemicals they use at their facilities and in their supply chains. Most directly, chemical companies must now inform customers whether or not certain downstream uses should be approved or not. This places adjacent industries such as automotive, high-tech and consumer products—all of which rely on products from the chemicals industry to manufacture their products—at risk under REACH.

ESS has been tracking this initiative over the past couple of years. Our solutions enable our customers to address REACH requirements as a normal course of business.

According to an AMR Research report called “The Hidden Backbone of U.S. Manufacturing,” in the United States alone, “55 percent of the companies
surveyed indicated direct dependence on the chemicals industry for inputs to their products. Within the food, medicine and other process industries, the percentage is even higher; nearly 75 percent of firms in the process industries have a direct dependency on chemicals as manufacturing inputs. Now imagine the impact on a company’s productivity if a critical supplier discontinues a certain product. Not only must alternate supply routes be identified, but ongoing product innovation and the ability to fulfill customer demand are also put at risk.”

The AMR study indicated that 90 percent of U.S. manufacturers said replacing their current chemical supplies with alternative materials would be either too expensive or technically infeasible.

As a result, the report says, REACH will have far-reaching consequences for manufacturers, which must now account for the directive’s mandates if they want to do business in affected European markets.

Tags: amr research chemicals industry european markets european union reach risk supply chains

Entry Filed under: Operational Risk Management, Sustainability