化工Multiple choice for the chemicals industry.pdfVIP

Multiple choice for the chemicals industry A long-term look at the industry shows that many factors assumed to increase value really do not. Thomas Augat, Eric Bartels, and Florian Budde n the chemical business today, with commodity, specialty, or diversified chemical Imore than 7,000 products fragmented into company. Within the product segments, dozens of geographic markets, very little however, the research delivered some clear seems simple or predictable. There are so messages about how to create shareholder many possible strategies in so many markets value. that industry analysts and executives alike struggle to form a clear sense of just what Listening to the capital markets creates shareholder value. The long-term data show that the industry’s While past performance is no guarantee of reputation as sluggish and slow-growth is future returns, a careful look at corporate largely unjustified. To begin with, although performance in this $1.6 trillion industry1 the chemical industry continues to shrink as can illuminate opportunities for value creation a percentage of overall economic activity— in the years ahead. Having reached maturity from 4 percent to less than 2 percent in the about 20 years ago, the industry’s average United States over the past 25 years— supply and demand cycles are now more shareholder returns are on par with the broad predictable. And unlike in the pharma and market indexes in the United States and telecom industries, no new technologies or Europe over the past 25 years. For example, regulations seem imminent that will transform the US chemical industry and US markets the industry.