Catalyzing the New

Chemicals at a crossroads

Despite healthy appearances, the global chemical industry faces change on multiple fronts, with the convergence of disruptive forces redefining its future.

Hidden pressures are mounting, revealing telltale signs of risk. Profound changes in downstream markets and the supply chain are digging in. Manufacturers are moving to more sustainable materials. There’s volatility in the extended chemical ecosystem and many customer markets are undergoing massive transformation. Global megatrends, macroeconomic trends and Amazon-era customer expectations are driving change at speed, putting conventional business models under ever more strain.

Depending on your readiness, adaptability and agility to respond, the collision of forces will bring threats and opportunities. Foresight is required to constantly scan and evaluate your exposure to disruption – combined with creative thinking and new digital capabilities to innovate for the new chemical industry landscape.

Four forces of disruption

The report takes a deep dive into the four disruptive trends that we think most likely to seriously impact the industry. With an understanding of these, you can target your capital investments, business models and innovation where they will be most effective.

1. Circular economy: The traditional ‘take-make-dispose’ model is being replaced by molecules and chemical products designed for constant recycling, re-use and sustainability.

2. Industrial recalibration: The technology-enabled transformation of manufacturing is revolutionizing what, where and how things are made, driven by changing consumer preferences.

3. Digitalization downstream: Digitalization maximizes margins by enabling true end-to-end transparency, more accurate forecasting, real-time pricing and personalized manufacturing.

4. Reworking work: With AI and smart machines reinventing how work is done, chemical companies need new workforce models to compete, attract and retain talent.

To compete in the New, chemical companies must reinvent

Turning disruption to your advantage requires technological, portfolio and business model change. But the commercial case is compelling. A recent Accenture study, for example, suggests that a typical chemical company with 10 percent EBIT could create an extra three to six percent on its P&L through transformation—adding significantly to its profit potential.

Embrace key elements of success

Connectivity and data-driven intelligence are key to embedding new capabilities as the core building blocks for growth.

Build new business models

As the chemical industry evolves, we expect five core new business models to dominate. The challenge is to understand how and where in this new landscape your business can best thrive.

1. Supply connector: Brokering chemical products and services, typically using online direct selling and/or distribution, with few or no manufacturing assets.
2. Outcome provider: Selling a product and/or system which addresses a client challenge or need, transforming a problem into a value proposition.
3. Product steward: Producing one or a few molecules, with global, flexible supply chains, to bringing products to market at speed and recycling them back again to close the loop.
4. Ecosystem innovator: Tapping into the broader business ecosystem with multiple partners to co-innovate new products and services, using multiple technologies.
5. Portfolio orchestrator: Operating as a diversified company linked by core technologies, competencies or chemistries, with regular acquisition and divestment of businesses.

Seize the moment

To support your transformation, the report will help you identify where you want to play, the capability pivots to get you there and key steps required to capitalize on future potential.

For those who are willing, the opportunity is clear. The time to seize it, is now.

Are you ready to lead in an era of epic disruption?