The $2 trillion chemicals industry continues to face challenges as it attempts to rebound from its worst year ever in 2009. The drop-off in demand appears to have bottomed out, but the damage has been done. Demand is rising, but in severely depressed levels — in some cases, declining by 40 percent. Most new growth is in Asia; Middle East producers continue to enjoy competitive advantages, while many assets in North America and Europe are severely impaired.

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2016 Chemicals Industry Trends
Targeted by shareholder activists, chemicals companies must finally shed old habits and adopt new productivity and digital strategies.

Our thought leadership

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The energy industry’s performance has plateaued recently, but a new approach can help. Instead of limiting the accountability for safety and environmental factors to an isolated function, this model shifts the responsibility to front-line workers.
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M&A activity has significantly shaped the chemical industry landscape in the recent past, and it will continue to do so. To succeed in this environment, chemicals companies must build the right capabilities along the full M&A life cycle.
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A series of recent interviews conducted by Strategy& with operations leaders in process industries revealed that while companies focused on optimizing manufacturing and the asset cost base, they overlooked significant real opportunities for long term value enhancements.
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This perspective is the first in a Strategy& series exploring the state of the chemical industry today.

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How we help our clients

PwC’s strategy consulting team Strategy& has extensive experience with large, international chemical corporations, having acted as an independent senior advisor on corporate strategy, investment portfolio decisions, and operational improvements. We support our clients with a global team possessing deep capability-based expertise in all major chemical industry sectors.

Strategy development and execution

We help clients build tailored solutions for tackling the full range of strategic and competitive challenges they face. Working with ambitious and condition-driven methodologies, our teams help clients energize their strategic debate, envision the future, set clear expectations, and develop and implement appropriate strategies, such as:

  • Growth strategies
  • Business portfolio optimization
  • Market entry strategies
Operational excellence and restructuring

We support our clients in the sustainable optimization of their entire cost base with:

  • Sourcing strategies for direct and indirect materials
  • Sales-force effectiveness optimization
  • General and administrative expenses cost reduction (e.g., shared services, outsourcing, offshoring)
  • Supply chain optimization, including operating asset effectiveness, production network redesign, and logistics optimization
Transaction support

Drawing on our proven industry expertise and our functional experience in the support of all phases of transaction processes, we accompany our clients during deal shaping, carve-out, closing, and integration program implementation. Major support activities are:

  • Acquisition strategies and target identification
  • Commercial due diligence support
  • Clean team synergy assessments and day one preparation
  • Postmerger integration program definition and management
  • Divestiture and carve-out
Innovation management

We help clients elaborate and implement competitive strategies for accessing, developing, and deploying innovations through such activities as:

  • R&D effectiveness assessments
  • Linkages of development and marketing
  • New product innovation and penetration strategies

Client examples

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