The Chemicals industry converts raw materials into over 70,000 different products and has an impact on over 96% of manufactured goods.
Industry Trends & Challenges
Chemicals companies face a number of opportunities and threats to their businesses. The companies best placed to deal with a challenge will consider it as an opportunity, whilst those poorly prepared will face the challenge as a threat.
Before the COVID-19 crisis, there were several trends that chemical companies were responding to. As the industry recovers from the pandemic some of those trends remain, and some new challenges have emerged. Those include:
- changing customer requirements
- unfavourable macro conditions
- volatile feedstock prices
Chemical demand is different around the world, especially now that specific regions are responsible for a large proportion of global manufacturing. Therefore, chemical companies face the challenge to follow their customer industries. For example:
- new electronics factories in China and Thailand drive growth in demand for solvents used to clean components and connectors
- new car assembly plant in Hungary drives growth in demand for automotive paints and coatings
- the extraction of shale oil and gas from reservoirs in the US needs chemicals to prevent the corrosion of well casings, to reduce drill-bit friction, and to kill bacteria.
What is the current position of the chemicals industry?
The chemicals industry in 2023 is in a period of adjustment following the pandemic. Sustainability is now at the forefront of agendas, as they strive to minimize their environmental impact and ensure long-term viability. Many chemicals’ companies are anticipated to boost their investment in R&D capabilities and exploit developments in decarbonization and recycling technology.
The industry must also navigate unfavourable macro conditions, which present hurdles such as economic uncertainty, regulatory complexity, and volatility in feedstock prices, all putting a strain on margins.
The chemicals industry has historically been a slow mover compared to other sectors in terms of embracing digitalization. However, senior executives are growing increasing aware of the transformative potential of digitalization. By harnessing digital technologies, chemical companies can enhance their existing products and services while also introducing innovative ones. This presents opportunities for chemical companies to:
- achieve 24/7 AI powered customer service
- achieve proactive sales with AI based customer demand
- boost sales with data-driven R&D
- expand customer understanding and identify new markets/applications for products
- improve targets
- utilize advanced analytics for smart maintenance and greater first-time production.
- Self-paced e-learning
- Designed for customer-facing professionals
- Identify differences between the major chemicals sectors.
- Apply knowledge of the structure of the chemicals sector and identify how companies interact within the supply chain.
- Recognize the role of various business functions within a typical chemical manufacturing company.
- Recall key metrics used to measure business performance.
- Answer questions regarding industry trends and business initiatives.
Chemicals Industry Insights
Cambashi Chemicals Industry Insights offers tactical industry intelligence updated by industry experts, that provides the latest information from across the globe:
• Tactical industry intelligence updated in real-time by industry experts
• The latest trends & challenges, business drivers, products & services, and technology
• Business strategies and initiatives
• Key players and consumer perspective
• Industry terminology and metrics
• Deeper knowledge across a variety of industry subjects
Low profit margins for chemical producers mean that there is little room for error in the manufacturing process – consistent quality is vital. So, processes in most chemical plants are run by what might be termed ‘intelligent machines’, which automatically adjust the controls to keep things running smoothly.
The systems which make the adjustments are known as Supervisory Control and Data Acquisition (SCADA) systems, and they continuously gather data in real-time from sensors, and then tell vats, valves, pumps and compressors, and other equipment exactly what it needs to do.
Chemicals companies utilize specialized IT solutions that support the business initiatives being adopted by chemical manufacturers:
- Business Intelligence (BI)
- Document and workflow management (PDM)
- Environmental, Health and Safety (EHS) compliance
- Manufacturing Execution Systems (MES)
- Supply Chain Management (SCM).
Here we can see the relative sizes of the Computer-Aided Technologies (Mechanical CAD, Mechanical CAE, CAM), PLM, BIM, and GIS software sectors in the global chemicals market. The total is worth approximately $US240 million annually. Note how BIM and MCAE are the largest segments, highlighting the importance of facilities management and engineering simulation within the chemicals sector.
Design/Engineering/Manufacturing SoftwareMarket Share – Chemicals Industry
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