Chemicals

We help clients deliver profitable growth in a hypercompetitive, low-growth world.

Taking strategic steps forward

Uncertainty is the new normal for chemical companies. But taking strategic steps can at least open doors to profitable growth, including value capture, digitization, and smarter portfolio management. At PwC’s Strategy&, our teams draw on a deep understanding of sector dynamics, extensive experience along the entire chemicals value chain, and broad functional capabilities to deliver comprehensive support to companies in the $2 trillion chemicals industry. We use our unique capabilities-driven strategy and Fit for Growth frameworks to assist clients with transaction support, operational excellence, efficiency enhancement, restructuring, and innovation management.

Taking strategic steps forward

2018 Chemicals Trends

2018 Chemicals Trends

The industry may finally be approaching a tipping point of more profitability.

For many years the global chemicals industry has been fighting declining margins, product commoditization, rapidly expanding competition in developing countries, and customers demanding more at lower prices. The story of how specialty chemicals and the fruits of innovation, which once commanded a premium, have slowly lost their luster over recent decades is well told; indeed, in many of Strategy&’s annual analyses in the past decade, we’ve bemoaned these troubling circumstances and the frustrations that the industry faces in figuring out a way to deal with them.

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How we can help you

Business strategy

We work with chemicals companies to build tailored solutions for tackling the full range of strategic and competitive challenges they face. 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

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Operations strategy

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.

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M&A transformation

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
  • Post-merger integration program definition and management
  • Divestitures and carve-outs

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Technology strategy

In today’s digital world, 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

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Insights

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Case studies

  • Business strategy
  • Business strategy
  • M&A transformation
  • M&A transformation
Specialty chemicals strategy development

Specialty chemicals strategy development

A major global chemicals company wanted to reexamine the strategy for its specialty chemicals division. Strategy& set a competitive standard for profitability for each business unit after researching competitors’ profitability, evaluating the client’s businesses against the standard, investigating drivers of sustainable profitability, and assessing the client’s ability to lead or compete. We supported the client in setting priorities for each individual business unit and the specialty chemicals division as a whole. Priorities included acquisitions and divestitures, investments for growth, and restructuring.

Comprehensive turnaround program for an international chemicals company

Comprehensive turnaround program for an international chemicals company

Strategy& was retained by a leading global chemicals company to redefine its strategic direction and to rapidly improve its profitability. We conducted a strategy review for each of the client’s individual businesses. The review included market attractiveness, positioning, and cost competitiveness. On the basis of this strategy review, we developed the future organizational model and a comprehensive turnaround plan. The plan focused on reorganization and cost reduction initiatives in overhead expenses, sales and marketing, manufacturing operations, and supply chain management. We assisted the client through implementation with program management and change activities to ensure full realization of the planned measures.

Merger of two global chemicals companies

Merger of two global chemicals companies

After a global chemicals company signed a major acquisition, Strategy& was engaged to support the client in structuring the post-merger approach by acting as part of the global and regional integration management offices, setting up program management tools, processes, governance, and integration teams. We conducted pre-closing clean team synergy assessments and supported our client in all Day One preparation activities. After closing, we supported the joint integration teams in all areas, providing content support where required. Strategy& put particular emphasis on cultural integration, performing cultural diagnostics, defining the target culture, and designing and implementing a detailed change program. As a result, the client integrated the acquisition target without losing key customers or employees, and fully realized the targeted synergies.

Preparation for divestiture of a petrochemical business

A larger European chemicals company retained Strategy& for the value-added divestment of its petrochemical business. We identified and implemented substantial cost savings programs, including head-count reduction, dramatic tightening of spending on contractors, and the closure of nonviable assets. We helped management set tough savings targets, then locked the savings into the budgets to help ensure deliverability. Relying on deep chemicals industry experience and connections, Strategy& brought in third parties and negotiated complex supply and marketing partnerships to reduce costs further. In addition, we developed a comprehensive cost savings and margin improvement program to successfully turn around a segment of a business earmarked for closure. As a result, the value of the business was increased significantly, and the client successfully sold its business.

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