Traders and transactional suppliers
These traders for large-scale petrochemicals and basic chemicals and polymers execute orders to buy and sell commodity contracts. They create value by using their deep understanding of market trends and supply and demand conditions to consistently offer a broad portfolio of standard products at an acceptable price range within a specific market situation. In order to excel at their value proposition, these players need substantial market insight and quick responsiveness to customer needs; excellent procurement capabilities that leverage scale; strong working capital management and access to hedging instruments; lean back offices and access to trading platforms; and leading-edge risk management and balancing of feedstock diversity and availability. Companies such as Exxon Mobil, Helm AG, and Shell Chemicals will likely fit well in this category.
Reliable low-cost suppliers
These players add value by offering highly standardized products (in petrochemicals and basic chemicals and polymers) and technical support at low cost and with guaranteed supply availability. Aligning delivery models and customer requirements with lean and agile supply chains will differentiate these suppliers. Future adopters will likely include Ineos and Sabic.
Customized product and service suppliers
These companies are providers of tailored products and technical services that add value by customizing products and service levels to the specific needs of their client base. Differentiating capabilities include well-managed personalized service levels matched to product life cycles and customer priorities, and a cost-conscious agile supply chain able to balance customization with standardization, taking into account both market trends and customer preferences. This will probably be the most complicated way to play, because it typically faces challenges from ongoing commoditization of specialty products and services. Companies in this category will likely include AkzoNobel, DSM, and Solvay.
These players introduce new and creative bundled materials and service solutions by fitting together disparate customer-focused technologies. They add value through materials and product innovation growing out of continuous optimizing of products and services that may be new to customers or that represent an advance from what they are already using. Their capabilities set includes co-creating new product concepts and applications with customers and substantiating scientific value and product claims, while maintaining value-based pricing and fast commercialization. Pure-play examples will likely include Chr. Hansen and Croda.
These companies add value by cooperating with ecosystem partners — often technology or equipment manufacturers, software providers, and distributors — to better address customer needs. This is a new way to play for chemicals companies, mainly suitable for downstream-oriented markets such as agrochemicals or chemicals used in water management and purification. Essential capabilities include the identification and integration of relevant capabilities from ecosystem partners, development of innovative and customized ideas for embedding chemical products into customer solutions, and insight into the use of disparate chemicals technologies to enhance customer systems, operations, and processes. Pure players in this part of the industry will likely include Syngenta or Monsanto in agrochemicals.