Market Assessment: A Success Story on How We Assisted a Prominent Base Chemicals Manufacturer Understand and Anticipate the Market Situation of Their Operating Subsidiaries

May 7, 2018

Revenue growth in the chemical industry is a result of higher prices and improving global economic conditions leading to enhanced demand in the end markets.

In the chemical industry, base chemicals are produced in large quantities and are generally sold to other end-use sectors or are used for the manufacture of products within the chemical industry. Base chemicals are classified into two groups namely:

  • Organic base chemicals
  • Inorganic base chemicals

The inorganic base chemicals include hydrogen chloride, calcium carbonate, nitric acid, sulphuric acid, and other such compounds. It also includes soaps and surfactants, fertilizers, and building materials. Organic base chemicals are either building blocks such as propene, ethene, and benzene or compounds made using these building blocks such as methanol and ethanoic acid.
Additionally, a significant growth contributor is the increase in global sales in the automotive industry, which is a major market for chemicals due to the high volume of chemical products used in the development process. However, for leading players in the chemical industry, agriculture and sustainable housing seem to be theIR_RFP two global megatrends helping them gain a competitive advantage.

The Business Challenge

The client– A leading player in the chemical industry specializing in the manufacture of base chemicals

Objective– To leverage market assessment to understand the market conditions and identify the potential market risks and opportunities.

A leading player in the chemical industry and an international manufacturer of base chemicals wanted to gain detailed insights on the market conditions. The client wanted to leverage the use of Infiniti ’s market assessment solution to better understand the market risks and opportunities. Their primary intention was to understand and anticipate the market situation of its operating subsidiaries in specific geographies. A decision to invest or close the subsidiary was to be based on the result. Their objectives included an assessment of the market by value and volume, state of the market, and identification of the key competitors and their performance in the market.

The base chemicals manufacturer also wanted a detailed report on the entry barriers, new opportunities, risks, and competition in the chemicals industry market space.

Results– Offered detailed insights on the global chemicals industry, which helped them make informed decisions. The market assessment solution also enabled the base chemical manufacture in developing an action plan for addressing the identified issues.

Base Chemicals

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The Journe

The market assessment experts at Infiniti carried out extensive research comprising of interviews and discussions with leading stakeholders across the chemical industry to help the client improve business efficiency. The experts at Infiniti further compiled information from a wide array of secondary sources such as paid industry databases, company presentations, and industry forums to help the client understand the competitive scenario.

The Solution and the Business Impact

With the help of Infiniti’s market assessment, the client was able to identify the market situation in specific geographic areas of their interest. Also, the base chemicals manufacturer was able to gather targeted data regarding the potential risks and opportunities in the chemical industry.

Leveraging market assessment also offered detailed insights on market growth, opportunities, trends, risks and key players in the market. This engagement also provided information on the economic, competitive, and political environment affecting the base chemicals firm. The market assessment engagement also helped the client to improve their overall organizational performance by enhancing their business strategies.

The Future

The rising demand for base chemicals lays the foundation for the growth of the chemical industry firms and subsequent industrial value creation. The global market for base chemicals is expected to grow further owing to the high demand from end-user industries such as soaps and detergents, fertilizers, textiles, and pulp & paper.

Moreover, factors such as intellectual property, customer and feedstock proximity, and technology know-how no longer help secure a sustainable competitive advantage. Players who are early adopters of innovative business models have the unique opportunity to act as game-changers in the global basic chemicals manufacturing space.

Chemical industry challenges

  • Commoditization of specialty chemicals– The financial performance of specialty chemicals companies has stagnated as many chemicals have become commodities. Also, leading players with broad specialty portfolios are in the undesirable position of having to refine their business models to reflect this sharp drop in pricing power.
  • Constant changes in innovation– With rapid technological advancements, the end-users’ demand for faster launch, less expensive products, and efficiency has increased. Therefore, chemical industry players must focus on inventing new entities and business models to enhance the product management strategies.

To successfully implement market assessment solutions in their business processes, base chemicals manufacturers need to understand that market intelligence is the foundation of collective intelligence. Moreover, it is essential to have a logical and structured action plan complete with KPIs and project success indicators that offer a clear direction and instill confidence when implementing an action plan.

A must-read case study for strategy specialists and decision makers looking to develop an understanding of the base chemicals industry.


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