An industry synonymous with innovation
In the past year, the global chemicals industry has been significantly impacted by the slowdown in global demand, continued oil price volatility, lifting of trade sanctions in Iran and to a lesser extent most recently, Brexit.
The industry has witnessed a wave of consolidation, particularly in the small to mid-sized specialty chemicals segment notwithstanding the mega deals like Bayer – Monsanto, Dow – Dupont and ChemsChina – Syngenta that have executives across the globe reflecting on the “art of the possible”.
Many of the leading players continue with excellence programs to drive efficiency and cost reduction together with a mix of other strategies being deployed to maximize market share and margin.
Today, EY's multi-disciplinary teams work with most of the world's leading chemical companies, adding significant value. We are engaged around carve-outs, integrations and operational restructurings. We also develop business and tax optimal operating models, bring transparency and flexibility into the supply chain, implement finance transformations including optimal utilization of shared service centers, enhance business processes, implement and customize SAP systems, and much more...
Major industry trends
- Remodeling business to optimize performance
Chemicals players are adopting a mix of strategies to maximize growth and profitability. We see companies completely revamping business strategy, shifting resources to higher return / rapid growth markets, enhancing investments in R & D and innovation around development of sustainable technologies, processes and products and streamlining portfolios through divestments and astute acquisitions to focus on core. Embracing a business and tax optimal model tuned to supporting higher margin growth demand markets is critical.
- Driving growth through sustainability & innovation
The industry is increasingly investing in ecofriendly technology, processes and products to ensure sustainable development and optimal utilization of assets. This has resulted in a wave of alliances and M& A activity with renewable energy and raw material producers. Whilst this has led to better access to markets with more stringent regulations, innovation does however come at a cost premium from a process re-engineering, technology and business remodeling perspective.
- Shift to higher margin solutions and specialty chemicals
Chemicals players continue to pursue higher margin specialty businesses through JV’s, capacity expansion and / or acquisitions and divestments of commodity businesses. Companies have increased their profitability and are protecting market share through the provision of customized solutions / products. Financing transactions and post integration challenges are not insignificant but the strengthened strategic positions have made this an attractive strategy for many.
- Digitizing the chemicals landscape
Big data and analytics is being deployed for much more than just forecasting. Chemicals companies are creating digital enterprises to gain competitive advantage. Companies use data analytics and cloud computing across their businesses to determine pricing strategy, manage product life cycles, shipments and logistics, carry our predictive modelling, measure operational performance, support deal making with customers, track demand growth and much more. Many have concerns around security, confidentiality and data privacy given also knowledge limitations due to lack of skilled personnel.
- Optimizing feedstock strategy
Petrochemical players customize various strategies to leverage low cost feedstock including ethane, methane, coal and propane. Strategies include development of Oil-to-Olefins (Middle East), Coal-to-Olefins / Methanol-to-Olefins (China) the development of mixed feed crackers (Europe, Middle East, India) and leveraging low cost feedstock available from shale (US). This has brought about increased M & A activity and alliances to access low-cost feedstock and resultantly a significant increase in technology advancement and process innovation.
How you can benefit from our experienced global chemicals professionals:
- We connect approximately 2,500 experienced global professionals who share information on current and emerging trends in the sector to help you manage risk, optimize performance, and increase operational effectiveness.
- We have multi-disciplinary teams working with global chemicals leaders.
- We bring you closer to your suppliers and customers to network and discuss business needs and issues.
- We bring together a pool of chemicals professionals with technical experience and industry knowledge.
- Industry risks are identified, analyzed, and communicated to service teams.
- We offer industry specific point-of-view and thought leadership.
- We develop educational platforms and training sessions for our people and clients.
- Expectations of Service Quality (ESQ) and Assessment of Service Quality (ASQ) process is routinely administered to a broad array of key stakeholders.
- Industry feedback is tracked and monitored for continual improvement.
- Senior partner on each engagement is focused on quality and staffing.
- We share relevant and practical thought leadership proactively.
- We organize issue-based forums addressing industry, technical and regulatory issues.
- We develop knowledge and learning initiatives that are vital to the strategic direction of our clients.
- We facilitate sessions and roundtables to help clients understand, prioritize and address matters critical to their success.