Market Challenges in the Netherlands and Belgium – 2024

The pharmaceutical, food, and drink processing sectors in the Netherlands and Belgium are confronting a host of market challenges, impacting investment decisions and project execution. Therefore, for equipment suppliers of capital machinery, understanding these challenges and adapting strategies accordingly is paramount. Here’s an overview of some of the main challenges that are affecting the type and size of capex projects emerging in 2024.

Market Challenges

Labour and Operational Costs

Higher labour and operational costs in Belgium and the Netherlands compared to other regions are prompting some manufacturers to consider relocating capex projects to cheaper territories like China, India, or the US in an attempt to secure better RoI.

Environmental Regulations

Meeting stringent environmental regulations is both costly and time-consuming, with other countries offering less demanding regulatory environments or none at all.

Funding Constraints

Access to public funding, crucial for many SMEs in the pharma and biotech sectors, is easier in France than in Belgium or the Netherlands. Big Pharma voices concerns over regulatory hurdles and the need for government incentives to justify investments.

Competition from Other Territories

France’s public investment programs and India’s significant investments in pharmaceutical manufacturing pose competition, drawing attention away from Belgium and the Netherlands.

Inflation and Investment Climate

Inflationary pressures, coupled with discouraging interest rates and a lack of government incentives, hamper investment enthusiasm. However, initiatives like Invest in Holland focus on attracting companies, albeit with a predominant emphasis on R&D and alternative protein sectors.

Sustainability and CSR Initiatives

Sustainability projects remain a priority for many food producers and processors, impacting traditional Capex projects substantially. Larger corporations can self-fund major investments alongside sustainability initiatives, whereas SMEs face funding challenges.

Energy Transition Challenges

Transitioning from gas to electricity poses significant challenges, with grids nearing capacity and many projects stalled or re-engineered. Planning applications are becoming more complex, delaying project timelines.

Land Use and Permitting Issues

Conservative permit granting coupled with government initiatives to reduce nitrogen emissions are delaying both greenfield and brownfield developments, complicating project approvals.

New Packaging Regulations

Anticipated EU-level Packaging and Packaging Waste Regulation (PPWR) sets stringent requirements for recyclability and raw materials, impacting packaging strategies for businesses.

Our Coverage – Overcome Market Challenges

Significantly, there are a multitude of challenges facing the process sector capex projects in the Netherlands and Belgium, there is still a great deal of upcoming project activity for suppliers of capital equipment and machinery.

As such, there is €5.7 billion of active upcoming capex tracked by our research team on MyProtel. Projects cover the food, drink, pharmaceutical, life sciences and laboratory sectors in the Netherlands and Belgium.

Where regions face headwinds, it is imperative to stay connected to emerging trends. This is because of being able to quickly pivot a commercial strategy toward areas of success and growth. Essentially, where capex is being sanctioned, it is often swift, with internal teams assigned to fast-tracking projects in response to resource shortages and in response to legislative or economic pressures.

Consequently, by working with Protel, it is possible to stay ahead of these trends and build relationships with the key stakeholders needed to ensure you are considered for the capex that is being implemented in 2024.

Summary

For equipment suppliers, overcoming these challenges requires advanced market insights and a proactive approach. Capex project intelligence becomes indispensable in understanding evolving market dynamics, identifying emerging opportunities, and mitigating risks effectively. By partnering with organizations offering comprehensive market insights, equipment suppliers can navigate the market challenges of the Netherlands and Belgium and position themselves for sustainable growth and success.

Let us help you navigate a changing and evolving commercial landscape. Contact us to speak to a member of our team about how Protel can help you.