• How Sharing is Innovating the Chemical Industry

    13. July 2018
    chemical industry trading

    When it comes to improving company performance, there are few better methods than the sharing of ideas. While business meetings, both formal and informal, are the mainstay for exchanging information, this approach is often between only two organizations or just a handful of individuals. But in today’s larger, more global business world, conferences are increasingly becoming the ‘go to’ method for sharing ideas.

    chemical industry suppliers

    Currently, the chemical industry is on the cusp of a new era, where ‘sustainability’ and ‘Industry 4.0’ are forging new paths for chemical companies. This makes the next few years a crucial time to share information to cope with these challenges.

    It has become a crucial time to attend conferences.

    Chemical Industry Sustainability

    Take for example the 2017 Green and Sustainable Chemistry Conference that took place in Berlin last year. A 4-day event that focused on the chemical industry’s impact on the environment and how chemical companies can save money and be more ecological at the same time.

    chemical industry suppliers

    One attendee, Christina Välimäki, the VP of Segment Marketing & Research at Elsevier, noted how the sharing of ideas at the event gave chemical suppliers the best-practice methods to achieve the advantages of green and sustainable chemistry. Ultimately, they were able to establish common goals for the betterment of individual chemical producers, as well as the chemical industry as a whole.

    As Välimäki notes, “The [conference] panellists all agreed on the importance of the following five principles for inspiring a more sustainable chemical industry:

    * Green chemistry needs to anticipate the problems it aims to solve

    * Green chemistry should not aim to justify negative perceptions of other elements of chemistry

    * Break down the green chemistry silo

    * Involve the circular economy into the product life cycle

    * Inform the public and demonstrate the value of safe, sustainable chemistry

    Chemical Industry 4.0

    Alongside the goal of sustainability, another key opportunity for the chemical industry is ‘Industry 4.0’; the notion that effective analysis of massive amounts of data can improve chemical innovation, production, supply, and sales.


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    In a recent interview, Sharon Todd, Executive Director at SCI, the UK-based Society of Chemical Industry, agreed that ‘big data’ has a big role to play. She noted that, “In the chemical industry in particular, data analysis offers the opportunity for vastly more efficient tools in research, formulation, and synthesis, as well as providing companies with unprecedented insight into the needs and wishes of consumers and industry.” Adding that, “Innovative strategies require that we be connected and make use of this capacity to collect and process untold amounts of data, and make these skills a part of the toolkit for every scientist entering industry.”

    Interestingly, Todd will share her ideas at the upcoming CIEX 2018, being held in Frankfurt, Germany, as she will participate in panel discussions on topics such as ‘Unlocking Opportunities from the Bio-Economy’ and ‘Capturing New Global and Regional Opportunities’.

    The CIEX 2018 event covers a wide range of topics affecting the chemical industry and includes speakers and panellists from key influencers such as BASF, Covestro, Cefic & DowDuPont.

    industrial chemical trading

    When Todd was asked further about her eagerness to participate at CIEX, it became clear that she also believes in the value of conferences for exchanging ideas, as well as sharing the challenges (and solutions) facing today’s chemical industry.

    Todd understands that a key part of rising to those challenges involves innovation, and she sees the CIEX event as a tool for exchanging novel ideas. As she states, “CIEX aims to explore cutting edge innovation in the rapidly evolving chemical industry and provides excellent opportunities for networking and learning best practices. It is critical to connect chemical producers and users to facilitate innovations to be commercialised successfully. Knowing your customer and having an intimate relationship with your supplier allows a collaborative and positive approach to new product development and launch.”

    CIEX SPOTCHEMI BLOG Sharon Todd How Sharing is Innovating the Chemical Industry pic D

    Adding that, “The high-quality innovation led programme showcasing developments & initiatives by leading companies combined with excellent networking opportunities make CIEX 2018 a stand out event.”

    Clearly the exchanging of ideas remains essential for the wellbeing of the chemical industry, as all technological advances are based on the foundations of earlier research; ‘Standing on the shoulders of giants,’ as Newton put it. And when it comes to business, nowhere can this be done better than at an event such as CIEX 2018, because without sharing, chemical industry innovation stagnates.

     


    ­­CIEX is the premier event created for R&D and Innovation experts from the consumer, industrial and specialty chemical sectors. Every year, CIEX brings together all players across the value chain to create a unique platform for participants to learn, exchange ideas, and collaborate. This year, CIEX is scheduled to be held on September 19-20 in Frankfurt, Germany.

    Connect, discuss and discover the most compelling ideas emerging globally with an unmatched group of innovators from companies such as Merck, DSM, BASF, Cefic, Lego, IKEA, DAW SE, Avantium, Evonik, Unilever, Covestro and many more!

    You can view the conference agenda and speaker panel at: https://ciex-eu.org. SPOTCHEMI partners and subscribers get 15% off. Use promo code SPOT15.


    ­­Photo credit: CIEX 2018, Labfolder, CanadianBloodServices, Tumblr, & UniversityofYork

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  • The Chemical Industry’s 2018 Half Year Report

    19. June 2018
    chemical supplier markets

    The handy website XmasClock.com tells us that we are over halfway through the year to Christmas. But before anyone starts panicking over what presents to buy, it is time to take stock on this year’s chemical industry progress. How has it performed over the last few months, and what does that tell us about the future for chemical production and supply?

    How has the Chemicals Industry Been Performing?

    While the chemical industry gave investors returns equal to other sectors from 2012 to 2016, the past two years have begun to show massive increase in return from investment. As chemical industry consultants as McKinsey noted in report from May 2018, stating, “Since mid-2016, chemical total return to shareholders performance has taken off again, posting a CAGR of 24 percent, compared with the world market’s 19 percent. The principal reasons have been a combination of a sharp increase in M&A activity across the chemical industry, which investors have generally supported, and a more favourable supply–demand position for petrochemical producers that has generated strong earnings growth.”

    How is the Chemicals Industry Doing Now?

    Most financial investors agree that the chemicals industry is in a strong position. As chemical industry experts at the investment consultancy Zacks noted in a recent report, “The chemical industry is riding an upturn in the world economy and continued strength across major end-use markets such as construction, automotive and electronics. Another positive for the industry is a recovery in demand in the energy space – a key chemical end-market that had been out of favour for a spell.” Adding that, “The recovery has also been driven by the rebound in crude oil prices from their historic lows.”

    Beyond oil price fluctuations, other factors have also been in play to create the chemical industry’s strong position. These include:

    The Return of the EU Chemical Sector

    The European chemical industry has been in much better health following years of stagnation. This is largely due to improved economic growth in the Eurozone, which has brought with it increased consumer confidence and lower unemployment.

    The recovery is evident in data from Cefic’s June 2018 report (pdf), which states that, “Production in the EU chemicals sector grew 1.9% from January to March 2018 compared to the same period of 2017. Producer prices were above the previous year’s level, growing 2.5% in the EU chemicals sector from January to March 2018 (y-o-y).” Additionally, “EU chemicals exports reached a value of €26.4 bn through February of the current year, rising by 1.5 bn (+5.8 per cent) compared to the first two months of 2017.”

    Increased Chemical Industry Investment

    In an industry famous for requiring high levels of investment the fact that large capital expenditure projects are going ahead shows signs of a healthy industry, especially in America. As Zacks notes, “The shale gas boom has incentivized a number of chemical companies including industry heavyweights such as BASF and LyondellBasell to invest billions of dollars to beef up capacity. According to the American Chemical Council (ACC), roughly 320 chemical projects have been already announced worth more than $185 billion, 62% of which is foreign direct investment.” Adding that, “The ACC expects chemical industry capital spending to rise 6.3% in 2018 and 6.8% in 2019 and eventually reach $48 billion by 2022.”

    chemical industry markets

    M&A’s Showing Value

    The large number of mergers and acquisitions that have occurred over the past few years are also now bearing fruit. Cost-cutting measures such as plant closures and reduced staffing, as well as synergy opportunities and economies of scale are all aiding chemical industry growth.

    US Chemical Industry Recovering

    The US chemical industry had a difficult 2017, with hurricanes Harvey, Maria, and Irma causing an estimated $200 billion worth of damage. Harvey was particularly damaging, as it flooded Houston and much of its petrochemical base, although all 17 named storms of that year caused infrastructure damage, as well as affecting production, imports and exports.

    With the Autumn 2017 hurricane season now passed, the industry has now generally recovered, and business is back to normal. The ACC is now predicting US chemical industry growth for 2019 of 3.9%.


    You can read more about the Chemicals Industry’s Future on SPOTCHEMI‘s parent company AG CHEMI GROUP‘s blog page.

    The Year Ahead for Chemicals

    chemical industry markets

    Chemical Industry Challenges

    But despite the positive news of progress and expansion in the global chemical industry, there are still worries among chemical industry producers. For example, there is concern over a recent spike in raw material prices, with the supply chain from American suppliers having only just recovered from the hurricane season, whilst China’s ‘Blue Skies’ policy is also affecting basic chemical output.
    There are also concerns over China’s general economic well-being, as recent years have seen a dip below the double-digit growth of the previous decade coupled with fears of a housing bubble.

    Zacks also acknowledges potential problems in agrichemical markets, noting that, “Chemical makers also continue to feel the pinch of depressed demand in agriculture markets. Sustained pressure on agricultural commodity prices is scuttling a meaningful recovery in this key chemical end-market. The outlook for the fertilizer and agricultural chemicals space remains cloudy due to continued weakness in crop prices, low farm income and sluggish economic conditions in certain emerging markets, including Latin America.”

    Fears of a global trade war are also present, especially following June’s G7 summit.

    chemical industry markets

    The Chemical Industry’s Bright Future

    Despite these bumps in the road ahead, the chemical industry has gone from strength to strength over the past two decades, even bouncing back strongly after the 2008 financial markets depression. As a result, the industry is likely to continue its upward trend in increasing output, value, and research levels.

    Even in the short term with the threat of a trade war looming, predictions remain upbeat. As Zacks notes, “While the chemical industry still faces a few headwinds, its momentum is expected to continue this year on sustained demand strength across light vehicles and construction markets, a rebound in demand in the energy place and significant shale-linked capital investment. Strategic actions including expansion of scale through acquisitions, operational efficiency improvement and continued focus on cost and productivity should help chemical makers weather the macroeconomic and industry-specific headwinds in 2018.”


    You can read more insights into the chemical industry and chemical industry markets at the SPOTCHEMI blog page.

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    Photo credit: TheManufacturer, Euractiv, AGCHEMIGROUP, Stiavelli, & Bilfinger

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  • Sustainability in the Chemical Industry: Depressing or Inspiring?

    9. May 2018
    SPOTCHEMI Industrial chemical supplier

    Sustainability is a key trend in modern business, and yet it can produce feelings of depression.

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    This is for two main reasons.

    1. It conjures up images of our planet’s resources being exhausted and of industrial waste piling up, leaving a broken planet for our grandchildren.
    2. It sets out an enormous challenge and lots of hardwork for everyone to be more sustainable to avoid a catastrophic scenario (see reason 1).

    Take for example, the UN Development Programme’s “call to action” of sustainable development goals. A quick look at the list shows that each goal is a massive problem…and there are seventeen of them. Of the seventeen, all are relevant for the chemical industry.

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    But sustainability goes further than politics and a list of high-minded concepts from elites in ivory towers. Today, sustainability is a requirement for business survival.

    As the industry consultants at BCG note, “Sustainability is no longer just a matter of complying with regulators and dealing with NGOs. As customers and investors join the chorus of concern about the need to protect resources over the long term, it’s become a hot topic in chemical industry boardrooms. And there’s a major upside to all this attention, as for many companies, the demand for sustainable products offers opportunities for revenue and margins that outweigh the associated costs.”

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    This is a point supported by Christina Välimäki, VP of Segment Marketing at Elsevier, as she reports on the Sustainable Brands website that, “By 2020, the market for ‘green’ chemistry is expected to reach $100 billion globally, with North America seeing an increase from $3 billion to over $20 billion during the same period. This growth, essential to the future of our planet, is a sign that the industry is engaged in much-needed change. Today, 8.3 percent of all deaths and 5.7 percent of the total burden of disease worldwide are related to chemical exposure.”

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    To meet these goals, the chemical industry needs both investment in new technology and to work together to achieve mutually beneficial gains.

    Fortunately, this is something that the chemical industry is particularly good at. As Eric Bischof, International Executive and Change Manager at Covestro, discussed in a recent interview with the hosts of the upcoming CIEX 2018 conference that will be held on 19th and 20th September in Frankfurt. He said, “Let‘s talk about the problems and challenges of sustainability, but let’s also put them in perspective. We have to be able to explain the (substantial) contribution of our products and solutions, while at the same time acknowledging the aspects that still need work. Some of them can only be achieved in collaboration, others need breakthrough innovations – we should be working on both.”

    While ‘facing challenges’ and ‘talking about problems’ may sound difficult, the reality is that chemical companies that fail to do so will be left behind. They will not have access to the rapidly expanding sustainable chemistry market and will lose both reputation and competitive advantage.

    As the consultants at BCG highlight, “the opportunity [provided by sustainability] is so great that it is the driving force behind new products and services. The emphasis is on redesigning existing products to use new, more sustainable inputs—ones that generate less waste in production, for instance, or yield products that are easier to recycle at the end of their useful lives. Since such materials usually cost more, companies need to identify the payoff, either in lower production costs or a higher price premium. The petroleum giant Total, for example, recently launched a joint venture with Corbion to build a PLA polymerization plant with an annual capacity of 75,000 tons. The plant will generate biodegradable plastics that will reduce end users’ solid waste—and support a higher price point than conventional plastics. Likewise, Borealis took note of the rising demand for blended plastics when it acquired MTM Plastics, which mixes recycled and virgin materials to generate commercial-grade plastics.”

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    Total and Corbion’s PLA polymerization plant

    While at present, many sustainable chemical or polymer products require a higher price point to cover increased costs, it is unlikely that this will always be the case. Both regional economies and the chemical industry will change as sustainability becomes less of a trend and more of a universal goal.

    As Välimäki acknowledges, “The chemical industry’s journey to sustainability is in its early stages, and we can expect to see plenty of further improvement and innovation in the coming years. As the world’s population nears nine billion, and the strain on the planet’s resources grows, this will become increasingly vital.”

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    All of which will take time, money, and an open-minded sharing of ideas. Many of the sustainable development goals laid out by the UN are relatively new concepts in the long, long history of the chemical industry. Business targets of ‘climate action’ or ‘responsible consumption and production’ were rarely discussed 100 years ago. Today they have become necessities, that require a united, forward-looking effort.

    As Bischof notes, “I believe most can be gained by discussing difficult and controversial topics rather than just sharing what has already been achieved.”

    It is this desire to find innovative ways to achieve sustainable goals that led to him taking part in CIEX 2018. Here he can meet other like-minded R&D experts across the chemical value chain to discuss the challenges and opportunities that the industry holds.

    In doing so he hopes to “gain insights into how the chemical and more specifically the plastics industry believes they can contribute to a more sustainable world.”

    At present, the planet is feeling the onset of climate change. As ice caps melt, plastic waste piles up, and mankind’s impact on the environment becomes ever more destructive, it finds itself in a time of great need. While this may sound depressing, it can also be inspiring. As Bischof notes, “Sustainability inspires Innovation – and great innovations have always occurred in times of great need.”


    CIEX Innovation 2018, chemical industry supplier

    CIEX is the premier event created for R&D and Innovation experts from the consumer, industrial and specialty chemical sectors. Every year, CIEX brings together all players across the value chain to create a unique platform for participants to learn, exchange ideas, and collaborate. This year, CIEX is scheduled to be held on September 19-20 in Frankfurt, Germany.

    Connect, discuss and discover the most compelling ideas emerging globally with an unmatched group of innovators from companies such as Merck, DSM, BASF, Cefic, Lego, IKEA, DAW SE, Avantium, Evonik, Unilever, Covestro and many more!


    You can view the conference agenda and speaker panel at: https://ciex-eu.org. SPOTCHEMI partners and subscribers get 15% off. Use promo code SPOT15.


     CIEX 2018, industrial chemical innovation

    Photo credit: UN, nswai, tobuya3dprinter, seed, Ecoproducts & byjus

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