Big Chem has Gone Global

The global chemical industry is a $3 trillion per year global behemoth with a vast array of products that impact our lives on a daily basis, from the soap and cosmetics we use daily to food and its packaging itself. Chemicals are used to make a wide variety of consumer goods, and play a key role in agriculture, manufacturing, construction, and service industries. Diverse fields such as life sciences, electronics, energy and automotive have a close interplay and dependence on a multitude of basic, commodity and specialty chemicals – not to mention polymers (which account for over three quarters of industry output). But some changes are underway.

Since the industry consolidated in the 1920’s, US and Western European producers have dominated the chemical industry. Indeed in the near term, the United States is expecting chemical exports to rise through 2020, and overall chemical shipments to rise by 25%. However, over the past few years the epicenter of the industry has been shifting to Asia.  China has become a major chemical-producing powerhouse, with India and other Southeast Asian countries following suit.

With the availability of cheap feedstock, the Middle East has been shoring up its production capacity.  This seismic shift in the industry has shaken up the old order in a historically highly-conservative industry. Today, old world relationship dynamics are increasingly giving way to a new world order of increased global competition.

In order to survive and thrive in this new environment, our team helps our clients better understand and integrate:

  • Global feedstock supply chain dynamics
  • Joint ventures, alliances, and partnerships
  • Acquisition possibilities by Asian companies who were previously viewed as Western acquisition targets
  • Proper leveraging and capitalizing on multiculturalism forces
  • Accelerated technology diffusion
  • Shifting power balances towards developing regions
  • Intangible and tangible value of authentic sustainability commitments
  • Concepts of sustainability and profitability not being mutually exclusive
  • Innovative ideas addressing needs of billions emerging from poverty

HAUS STAT #61: While U.S. Chemical Exports are expected to grow by 8% through 2019, the long-term chemical balance of power is shifting to Asia.

Global Chemical Sales by Region: 2030

Asia: 66%
Europe: 15%
NAFTA: 12%
Other: 7%