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The future of chemical multinational corporations in China

Together, the Association of International Chemical Manufacturers and Accenture identify six key issues facing the Chinese chemical industry.

Overview

In 2015, the Association of International Chemical Manufacturers (AICM) launched an initiative to explore trends affecting the chemical industry in China. This effort—“The Future of Chemical Multinational Corporations in China”—culminated in a CEO Summit on the topic, held in Shanghai in November 2015.

In support of this initiative, AICM and Accenture collaborated on a survey to identify the key issues that were top of mind for CEOs at chemical multinational corporations in China. The following six topics were highlighted by the executives: Sustainability and Responsible Care; innovation and R&D; China’s economy and the “new state;” mergers, acquisitions and joint ventures; cost escalation; and human resources. Overall, the research also revealed that despite the challenging environment in China, CEOs are still optimistic and see tremendous opportunity in the world’s largest market.

DOWNLOAD THE REPORT [PDF]

SIX ISSUES TO CONSIDER

The Accenture/AICM 2015 CEO Survey plus additional discussions with CEOs revealed six key areas that top the list of concerns for chemical executives in China. See highlights from the survey below and download the report for more detailed results.

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1. Sustainability and
Responsible Care

2. Innovation and R&D

3. China’s economy and
the “new state”

4. Mergers, acquisitions
and joint ventures

image

5. Cost escalation

image

6. Human resources

95%

​agree sustainability is becoming more important than ever in China.

75%

cite the growing need to protect the environment.

65%

note the relationship between sustainability and a focus on safety and health hazards.

85%

indicate that talent shortages are an obstacle in pursuing innovation and R&D.

69%

suggest that evolving customer preferences are increasing the importance of innovation.

62%

point to the lack of an R&D culture as a key challenge in driving innovation.

82%

cite overcapacity as a major cause of the economic slowdown in China.

71%

state that improved cost control and process efficiencies can help drive growth.

59%

believe that industry consolidation will help sustain the industry in the “new state.”

85%

say that M&A makes more sense than building new plants given current overcapacity.

71%

reveal that the integration of acquired companies is a challenge when pursuing M&A.

69%

plan to actively undertake strategic deals.

100%

agree that shifting from low-cost to value-added products helps offset rising costs.

88%

are looking to consolidation to tackle the cost escalation challenge.

67%

acknowledge that their costs are higher than those of their competitors.

67%

plan to hire more local talent, seeing potential in China’s pool of managers.

67%

intend to empower local decision making.

58%

are considering rotating Chinese employees through global roles.

ABOUT AICM & THE RESEARCH

About AICM

The Association of International Chemical Manufacturers (AICM) was founded in 1988 and represents nearly 70 major multinational companies in the chemical industry of China. Its members’ businesses cover the manufacture, sales, transportation, distribution and disposal of chemicals. AICM and its members share a common vision: to contribute to the sustainable development of a responsible chemical industry in China. AICM commits to promote Responsible Care and other globally recognized chemical management principles among all stakeholders; advocate cost-effective, science- and risk-based policies; and build up the contributive role of the chemical industry to the Chinese economy.

About AICM

The Association of International Chemical Manufacturers (AICM) was founded in 1988 and represents nearly 70 major multinational companies in the chemical industry of China. Its members’ businesses cover the manufacture, sales, transportation, distribution and disposal of chemicals. AICM and its members share a common vision: to contribute to the sustainable development of a responsible chemical industry in China. AICM commits to promote Responsible Care® and other globally recognized chemical management principles among all stakeholders; advocate cost-effective, science- and risk-based policies; and build up the contributive role of the chemical industry to the Chinese economy.

About the Research 

To support AICM’s “Future of Chemical Multinational Corporations in China” initiative, Accenture conducted an online survey of 33 CEOs of multinational chemical companies in China, followed by additional phone interviews. More than 60 percent of participants were from specialties companies, and 52 percent were in petrochemicals, polymers and elastomers. In addition, 70 percent of the CEOs had five years or more experience working in the Chinese markets.

About the Research 

To support AICM’s “Future of Chemical Multinational Corporations in China” initiative, Accenture conducted an online survey of 33 CEOs of multinational chemical companies in China, followed by additional phone interviews. More than 60 percent of participants were from specialties companies, and 52 percent were in petrochemicals, polymers and elastomers. In addition, 70 percent of the CEOs had five years or more experience working in the Chinese markets.

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