The challenges of raw material procurement, uncertain trade and tax policies, new forms of competition and more demanding consumers. These trends are coming together and putting a lot of pressure on chemical manufacturer. Although most companies have responded to the call to adapt to this era, a small number of innovative companies are emerging. We call them chemistry champions.
Call for sustainable development and recycling
Chemical manufacturers are facing huge challenges. Trade and taxation have become more complex, policies uncertain, and government regulations strict.
The competition is more and more intense, and the talent pool of engineers and factory workers is less and less. Nowadays, the concept of circular economy has been welcomed by consumers, which makes them understand and criticize more about how chemicals are manufactured, used, recycled or treated. As a result, sustainability and circularity are no longer random – they now determine competitive advantage and form the basis for business transformation.
Accenture’s research shows that by 2025, digitization could open up as much as $550 billion for the chemical industry.
New value proposition of chemical industry
When chemical manufacturers face a wide range of economic and social challenges, they can use these new value propositions to seize the opportunities driven by consumers in the 21st century.
Advantages of design
Chemical companies are just beginning to embrace the possibilities of digital innovation. According to our survey, they invest the most in innovation in product development, which is not surprising.
In order to really take advantage of these new digital value propositions, chemical manufacturers must completely redesign the products and services they provide. They must also create new and special value on a large scale in key business functions to obtain the return of digital investment.
Among the 121 chemical enterprises with annual revenue of more than 1 billion US dollars, less than a quarter of them have successfully realized digital innovation in R & D and production operation. These companies not only successfully expanded more than half of the proof of concept (POC), but also achieved higher than average returns on digital investment (Rodi). We call them chemistry champions.
Most of the other companies – more than 75% of the companies we surveyed – earn less than the industry average (12%) regardless of their size. That means just scaling up doesn’t guarantee success.