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Transforming Chemicals: BCG’s Comprehensive Approach
BCG’s chemicals consulting team draws on extensive expertise around the globe and along the entire chemical value chain. Based on our profound understanding of chemical industry trends, we shape the value creation agendas of chemical companies worldwide, implement efficient operating models, and boost the performance of company operations.
We serve a diverse range of clients, from global majors to regional and family-owned champions and start-ups as well as industry-leading associations and organizations. We advise across the complete breadth of chemical industry sectors, including petrochemicals, commodity plastics, specialty chemicals, biotechnology, agrochemicals, electronic chemicals, and chemical distribution.
By combining our deep industry expertise, proprietary tools, and proven approaches, we help our clients achieve their net zero roadmaps, create significant business value, realize profitable growth, and build winning strategies and capabilities—enabling them to achieve a tangible impact on their bottom line and on shareholder value.
Here are some of our main areas of focus:
Digital and AI
The chemical industry digital transformation is well underway. New AI-driven technologies enable companies to streamline their processes and organization, optimize manufacturing, and accelerate innovation in new technologies, products, and formulations. We work with clients to help them harness the power of AI to navigate their way to the next level of digital transformation and achieve competitive advantage.
Strategy and Transactions
Tectonic shifts are shaping the future of the chemical industry. However, one major shift is altering the competitive landscape: players from emerging regions are gaining market share—organically and through M&A—while those in more established areas are optimizing their business portfolios to ensure competitiveness. Our chemicals consultants help companies with strategic transformations, including end-to-end transaction support (sell-side and buy-side), identifying potential targets, carrying out (vendor) due diligence, orchestrating M&A processes, and supporting post-merger integrations.
Sustainability
Decarbonization in chemicals is rapidly becoming an imperative for the chemical industry. Our chemicals consulting teams support companies in achieving their net zero roadmaps and reducing Scope 1, Scope 2, and Scope 3 emissions. We also translate sustainability trends in the chemical industry into a differentiating competitive positioning, portfolio advantages, and new circular business models. We help our clients capture value by monetizing green premium pricing and scaling new green businesses.
Go-to-Market and Commercial Strategies
Among today’s key chemical industry challenges, chemical companies increasingly need to adopt value-based approaches that are radically different from the volume-based ones that worked in the past. Our innovative concepts help companies create value through digitally enabled selling, value-based pricing, monetization of market volatility, and next-generation sales approaches.
The Future of Process Industries
Explore our collection of insights and learn how to navigate the six key trends that are reshaping the future of basic and industrial materials.
Our Clients' Success in Chemicals
Video
August 29, 2024
Learn how the Global Impact Coalition (GIC) is helping to reduce emissions and advance circularity in the hard-to-abate chemical sector.
Growth Strategy. One of Southeast Asia’s major petrochemical companies wanted to explore opportunities in specialty chemicals to counter the cyclical nature of its commodity-based business. BCG helped the client establish an M&A arm and update its business model to successfully integrate and derive value from new endeavors.
Post-Merger Integration. A European chemical conglomerate needed help with the integration of an acquired specialty chemical company. BCG helped the client streamline and maximize cost synergies for support functions and implement best practices to ensure high top-line synergies for all business activities. These synergies resulted in 11% of target sales—several percentage points above historical transactions.
Operations. Poor planning at a batch-process chemical client created enterprise-wide problems that hurt market opportunities, sales, production, and working capital. With BCG’s assistance, the company streamlined sales and operations processes, which improved coordination between sales and production and resulted in a 30% increase in throughput and a 25% increase in on-time delivery.
Commercial Excellence. A lack of customer segmentation and a uniform pricing strategy hobbled a European chemical distributor’s go-to-market approach and disincentivized its salesforce. BCG worked with the client to roll out a commercial excellence plan that saved millions of euros and included tools to flag transactions with repricing potential and to support account managers’ build quotes. The plan also included price-tracking KPIs and related training and documentation.
Digital Transformation. As part of the broader chemical industry digital transformation, a Middle Eastern petrochemical client wanted to expand a digital and AI program in its operations to cover the entire enterprise. BCG helped the client create a three-year plan that encompassed several dozen digital initiatives for multiple business units. The plan included a detailed assessment of costs, enablers, and risks, among other factors.
Our Chemical Industry Tools and Solutions
BCG’s suite of leading-edge proprietary solutions and tools helps clients capitalize on the latest chemical industry trends by optimizing their operations and making smarter strategic decisions, including the following:
M&A in Chemicals Tool
Our M&A tool gives clients a holistic understanding of deal activities in the chemical industry. By highlighting sectors and regions that are poised for consolidation or offer promising opportunities, it provides clients with actionable insights while identifying emerging players.
M&A in Chemicals Tool
Value Creation in Chemicals Tool
BCG’s Value Creation tool enables clients to identify the key drivers of both their own and their peers’ total shareholder returns. The tool dissects the contributions from different Total Shareholder Return (TSR) components over time, providing chemical companies with a detailed understanding of how to create value.
Value Creation in Chemicals Tool
Chemical Distribution Market Model
Our global chemical distribution market model synthesizes information from multiple sources and hundreds of data points from chemical principals and distributors to assess overall market development and forecast developments in specialty chemical products versus commodity products by geography. Our proprietary market model helps both specialty- and commodity-driven chemical distribution companies navigate strategic, M&A, and operational topics across segments and geographies.
Chemical Distribution Market Model
Supply Curves Tool
Through sophisticated modelling, BCG’s Supply Curves tool helps clients assess the impact of capacity expansion, efficiency enhancements, and feedstock price volatility on their businesses’ performance. Detailed supply curves and customized scenarios allow us to forecast the cost competitiveness of different production sites worldwide—today and in the future.
Supply Curves Tool
Our Latest Thinking on Chemicals
Article
October 31, 2024
While our latest report found meaningful improvement in total shareholder return across the chemical industry, the full picture is more nuanced.
Article
October 29, 2024
Eight important trends will reshape the industry over the next ten years. Players must adapt to these developments or risk losing their competitive edge.
Article
August 7, 2024
Costs are threatening the ability of process companies to take advantage of both organic and inorganic growth opportunities because of expanding financial constraints.
Article
June 28, 2024
Each year, we throw away nearly $200 billion of material that could be recycled. But companies can flip the script.
Meet BCG’s Chemicals Consulting Leadership Team
Our chemicals consulting team helps companies around the world and across the chemical value chain—from petrochemical companies and specialty chemical products players to chemical distribution companies—shape their growth strategies, navigate decarbonization in chemicals, and tap AI’s potential so they can achieve the next level of performance. Here are some of our leaders on the topic.
