Strategy that’s built to deliver from the start
How companies can transform their supply chains in light of disruption
Chemicals companies must define now who they want to be in the future
For chemical companies, today’s greatest challenges aren’t coming from commoditisation or competition. They’re stemming from a wildly unpredictable economic and geopolitical business environment with trade wars, perplexing regulatory policies, cybersecurity threats, demand shifts in huge markets like China, the weakening of the EU, increasing risks to global supply chains and the longer term impacts of sustainability trends and accelerating digitisation.
At Strategy&, we help clients forge a path that’s powerful enough to breakthrough in the face of unknown possibilities; a path that’s built on what you do best, so you control and define your future. We understand sector dynamics along the entire chemicals value chain. Because of this, our strategy is built to deliver from the start. Strategy& shows you what’s possible and what you need to do to succeed.
Transformation and sustainability might be the new watchwords.
What concrete steps should chemicals companies undertake to prepare for the future’s increasingly unfamiliar business environment — and to exist in a volatile present?
When a major global chemicals company wanted to reassess its specialty chemicals division, they called us. After researching competitors’ profitability, evaluating industry standards, investigating drivers of sustainable profitability, and assessing the client’s ability to lead or compete, Strategy& set a competitive standard for profitability for each business unit within the company. We supported the client in setting priorities for individual units and the specialty chemicals division as a whole while prioritising acquisitions and divestitures, investments for growth, and restructuring.
Strategy& was retained by a leading international chemicals company to quickly redefine its strategic direction and improve profitability. After conducting a strategy review for each of the client’s individual businesses, including market attractiveness, positioning, and cost competitiveness, we developed the future organisational model and a comprehensive turnaround plan. Focusing on reorganisation and cost reduction in overhead expenses, sales and marketing, manufacturing operations, and supply chain management, we guided the client through implementation. This included programme management and change activities to ensure a full realisation of the plan.
Strategy& was a guiding force in helping a global chemicals company successfully carry out the acquisition of another international player. Our work began with structuring the post-merger action plan and working with the global and regional integration management offices. Strategy& was responsible for setting up programme management tools, processes, governance, and integration teams. By conducting pre-closing clean team synergy assessments, we were able to support the 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 special emphasis on cultural integration by performing cultural diagnostics, defining the target culture, and designing and implementing a detailed change programme. As a direct result of the Strategy& plan, the client successfully achieved the acquisition target without losing key customers or employees while fully realising the targeted synergies.
A large European chemicals company retained Strategy& for the value-added divestment of its petrochemical business. We identified and implemented substantial cost savings programmes, including head-count reduction, dramatic tightening of spending on contractors, and the closure of nonviable assets. Strategy& guided management through setting tough savings targets and locking savings into the budgets to ensure deliverability.
Relying on decades of industry experience and connections, Strategy& brought in third parties and negotiated complex supply and marketing partnerships, successfully reducing costs even further. In addition, Strategy& developed a comprehensive cost savings and margin improvement programme to completely turn around a segment of a business earmarked for closure. As a direct result of this customised, comprehensive M&A plan, the value of the business was increased significantly, and the client successfully sold its business.