Chemicals

The industry is challenged by a combination of continuously weak demand in markets, pricing pressure, and high competition

What drives the industry according to public sentiment?

Growing pricing pressure, driven by rising Chinese export volumes, is putting additional strain on margins. This competitive landscape demands a focus on efficiency and differentiation to stay ahead.

The need for a holistic transformation of supply chains is becoming urgent, particularly amid uncertainties surrounding base chemicals production in Germany. Companies must reevaluate their sourcing strategies to ensure long-term resilience.

High energy prices, especially for electricity, are exacerbating global competitive disadvantages, making it critical for companies to invest in cost-effective energy solutions.

The investment climate for green transformation remains challenging, with ambitious emissions reduction targets of -55% by 2030 shaping future capital allocation.

Meanwhile, a shrinking pool of highly-skilled workers in Germany is creating significant hurdles for innovation, pushing companies to invest in workforce development and technological advancements to support competitiveness.

How business leaders can take position according to BCG experts?

Optimizing the portfolio from a strategic, financial, and ownership perspective is essential to unlocking value creation potential. A thorough evaluation ensures alignment with long-term growth objectives while maximizing shareholder returns.

In times of shifting supply and value chains, heightened market awareness is critical. Leveraging data-driven insights allows for a deeper understanding of market dynamics and better identification of opportunities within evolving landscapes.

Rethinking the footprint and supply strategies for feedstock and intermediates is necessary to ensure greater operational efficiency. This requires a reassessment of integration levels to foster more resilient and adaptable supply networks.

A comprehensive review of cost structures, including procurement and fixed costs, is crucial. Furthermore, an improved forecasting is key to ensure supply agility at low working capital.

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