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German chemical industry

A German Chemical Industry Client Saved Over 25% of its Operating Costs with Market Potential Analysis

German Chemical Industry Overview

Robust growth of construction industry, oil exploration, and production activities are expected to propel the growth of the German chemical industry over the coming years. However, the German chemical industry is not completely free of challenges. Foreign companies in the sector are facing major setbacks in terms of growth and market share in Germany. Besides, lowered demand levels of chemicals, ongoing cost pressures, and changing asset structure are increasing challenges for companies operating in the German chemical industry. As such, German chemical companies are in the need to adjust to the new environment and find ways to achieve profitability. This is where Infiniti steps in with its best-in-class market potential analysis. By leveraging market potential analysis, companies in the chemical sector can identify lucrative opportunities and develop strategic plans to maintain productivity.

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Business Challenges Faced:

A global chemical company with 15+ production centers in Germany, struggled with decreased contribution margins, high fixed costs, and negative EBIT (earnings before interests and taxes). Also, external factors such as economic slowdown, increased competition from low-price products, and overcapacity issues negatively affected the company’s overall revenues. Besides, the German chemical industry client struggled to reflect the rapidly changing price of raw materials in its own pricing. The client, therefore, wanted to identify untapped market opportunities and revise their current strategies. Also, by keeping pace with market transformations, the client wanted to adjust to the new environment and find ways to achieve profitability. The client, therefore, choose to partner with Infiniti Research to leverage their expertise in offering market potential analysis.

By partnering with Infiniti Research, the German chemical industry client also wanted to find ways to become profitable within the industry’s new environment, innovate product offerings, improve financial performance, and revamp pricing strategies.

Integrated Approach:

The initial phase of the market potential analysis engagement involved identifying and reviewing innovation options. This involved conducting a market overview and customer value proposition analysis. Besides, this phase of the market potential analysis engagement involved performing competitive analysis.

Also, the experts at Infiniti Research worked closely with the client to understand their current strategies, sales performance, variable and fixed costs, production assets, investment plans, supply chain management processes, and financial performance. Secondly, our experts assessed sources of value and customer needs. Lastly, our experts helped the client to develop new tools, processes, and offers to tailor products to specific customer needs.

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Business Outcome:

Infiniti’s support helped the German chemical industry client on their journey to growth, improved profits, and enhanced capabilities. With Infiniti’s market potential analysis, the German chemical industry client was also able to develop value pricing tool and a performance-tracking dashboard. This helped the client in monitoring prices and in customer management. Within six months of leveraging our market potential analysis, the company exceeded its 12-month goals. The German chemical industry client was also able to improve spend data quality, visibility, and accuracy.

To reduce operating costs and run the operations smoothly, the experts recommended the client to consider outsourcing portions of functions to contractors. This helped the client to eliminate maintenance capital and save over 25% of operating costs. By understanding supply chain risks, managing cash outflows, developing a range of scenarios to predict future outcomes, and identifying local suppliers, the German chemical industry client was also able to safeguard the supply chain operations and reduce logistics costs.

By leveraging Infiniti’s market potential analysis, the client was also able to:

  • Identify lucrative market opportunities and revamp the business model
  • Keep pace with market uncertainties
  • Innovate product offerings and improve financial performance
  • Revamp pricing strategies to meet the changing demand

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12 Principles of Green Chemistry Explained

Chemicals are usually looked upon with an evil eye in the modern world. People are worried about environmental safety and health issues that are brought about by harmful chemicals. In addition to that, chemical companies themselves are struggling when it comes to the safe disposal of toxic substances and leakages. It comes as no surprise that people all over the world prefer organic goods in a bid to avoid such harmful chemicals. However, the truth is that chemicals are omnipresent, and cannot be avoided, as it essential in the manufacturing of infrastructure, electronic devices, household items, and even the food we consume. As a result, the concept of green chemistry has emerged to soften the impact of harmful chemicals on the environment and human health. Green chemistry or sustainable chemistry focuses on designing products and processes that minimize the generation or use of hazardous substances. It is different from environmental chemistry as it focuses more on technology to prevent pollution and reduce the consumption of non-renewable resources.

Principles of Green Chemistry

12 Principles of Green Chemistry

Prevention

The saying “prevention is better than cure” is true not only in the healthcare industry but also the chemical industry. It is essential in green chemistry to design processes that reduce wastages as it is better to prevent it in the first place than to treat or clean up the waste after its creation.

Atom economy

All chemicals in green chemistry are a result of reactions at an atomic level. So by figuring out the atoms that are incorporated into the final product and the atoms that are wasted, the efficiency of the reaction can be increased. Manufacturers need to measure the atom economy percentage, which can be calculated by analyzing the formula weight of the atom utilized and all other reactants.

Atom economy = (FW of atoms utilized/FW of all reactants) X 100

To drive profits, organizations need to head forward and embrace new techniques and processes to unlock their hidden potential. Do you agree?

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Less hazardous chemical syntheses

This principle outlines that wherever applicable, synthetic methods should be used since they possesses little or no toxins that affect the environment or human health. The chemical industry may face difficulty in implementing this green chemistry principle as chemists usually work with highly toxic substances that have no substitute. However, it can be practiced by paying attention to the materials used for bring about chemical transformation.

Designing safer chemicals

Players in the greeb chemistry chemical industry should strive to reduce the toxicity of their final product without compromising on their functional efficacy. The green chemistry chemical industry often prefers highly reactive chemicals as they affect molecular transformation. However, it may also react with unintended elements in the environment or humans.

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Safer solvents and auxiliaries

Avoiding the use of auxiliary substances like solvents and separation agents whenever possible is one of the most important principles of green chemistry. Although reactions may not proceed without the use of solvents or mass separation agents, players in the green chemistry chemical industry can opt to use safer auxiliaries.

Design for energy efficiency

Chemical companies should design their products to consume less energy to decrease the overall environmental and economic impact. Green chemistry can be achieved by using synthetic methods at ambient temperature and pressure. Improving the green chemistry energy efficiency in the chemical manufacturing process will reduce the dependency on fossil fuels.

Use of renewable feedstocks

Although the concept of producing fuels and chemicals from feedstocks that never deplete seems impracticable, it is not entirely impossible. This green chemistry principle can become a reality due to developments in biotechnology, physics, agronomy, toxicology, and engineering. As a result, in green chemistry it allows chemical companies to use a renewable raw material or feedstock.

Reduce derivatives

To abide by the principles of green chemistry, chemical companies should avoid or reduce the use of unnecessary derivatives including blocking group, protection, and temporary modification of chemical or physical properties. Using such derivatives will require additional reagents further in the manufacturing process and generate additional waste.

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strategic business analysis

Trouble in Paradise for Chemical Manufacturers? 4 Key Challenges in The Industry

In today’s rapid business scenario, a company’s lack of agility will significantly affect their ability to be competitive. The chemical industry being highly volatile, requires the players in this sector to evolve and adapt themselves to the changing market conditions constantly. To help them achieve this, chemical manufacturers must have a reliable IT infrastructure and ERP system that can analyze operational data, support critical business functions, and ensure improved organizational transparency.

With the rising competition on one side and mounting challenges on the other, the only option left with the chemical manufacturers to survive in the market is to covert these challenges into opportunities.

Contact our experts to learn how our solutions have helped leading chemical manufacturers address market needs.

Challenges Faced by Chemical Manufacturers

Unanticipated variations in commodity prices

Going by the trend a decade ago, the energy costs appeared to be on an upward climb, but the recent years have witnessed the emergence of cheaper forms of energy. This would have been a sigh of relief for energy manufacturers if only the benefits of lower energy prices were distributed evenly on a country-by-country basis.

Therefore, chemical companies are required to have a robust ERP system that will help them respond to fluctuations in energy prices quickly.

Increased number of recalls and quality audits

Chemical manufacturers are exposed to a variety of government and other regulatory compliance. Therefore, it is essential for them to maintain strict quality management and detailed product information.

Chemical manufacturers are also required to capture data from operational processes accurately so that in case of any recalls they can be prepared for it. To equip themselves for quality audit, the chemical companies must integrate traceability data across the business and should be made accessible to various stakeholders such as supplier and customers during the quality audit process.

Managing manufacturing and operational data

The needs and demands of different stakeholders to chemical companies may be different. E.g., while shareholders look for profit and revenue, customers want more for lesser money, and the regulators respond to safety and environmental concerns.

By managing their operational and manufacturing data efficiently, chemical manufacturers can ensure success in responding to the requirement of various stakeholders in their value-chain.

Cutting down formula costs to create new efficiencies

The availability of raw materials to chemical companies are affected by factors such as the seasonality, cost of purchase, and maintenance constraints, etc. But at the same time, chemical manufacturers have to ensure that they procure the right materials with the required specifications to comply with the standards of the formulations.

Chemical companies must work smarter to achieve the right resource mix and formula optimization at the minimum cost so that they can satisfy both their internal and external stakeholders.


To know more about the challenges faced by chemical manufacturers, request more info.

Market Intelligence

The Effect of Global Trends on Chemical Companies

The global economic situation for the chemical industry is highly unpredictable and volatile. The top management of companies need to keep a close watch on the global trends that would directly or indirectly impact their business. It is also essential to stay up-to-date with the changing trends to get a bigger picture of the market conditions and even to know what exactly your competitors are up to. Curious to know what are the trends that have been keeping chemical companies on their toes in order to make quick alterations in operation and gain the early bird advantage in the market?IR_Brochure

The era of digitization

The Internet and mobile phones have taken over the world. The increasing access and exposure to technology have made customers more demanding. Today, the customers want more intimacy and transparency with the company. Even the B2B customers have started demanding detail order receipts and the ability to track shipments in real-time. Vendors and customers are more likely to lose their trust in companies that are technologically obsolete. Therefore it has become the need of the hour for chemical companies to update themselves.

Regulatory Changes

The regulations governing everything from material handling, labeling, manufacturing, storage, and shipping of products keep changing from time to time. The rules and  regulations in the chemical industry vary from region to region or from country to country. Therefore, chemical companies operating in different regions, especially across borders must be well aware of the existing regulations and alter their operations accordingly to prevent regulatory and legal interventions.

Distribution Channel Changes

Chemical companies are widely adopting trends like mass customization. Such trends are expected to impact the manufacturing and supply chain of chemical substances. Companies are likely to take advantage of mass communication by shipping directly to customers rather than selling to a few manufacturers that create their own products and manage distribution. With chemical companies becoming more accessible to customers, more number of customers might place smaller orders making it essential for players in the industry to have a strong supply chain.

To know more about the global trends that can impact chemical companiesAsk an analyst

Watch Out for These Chemical Industry Trends in The Upcoming Year

Technological disruptions in the chemical industry can give rise to both challenges and opportunities. But thanks to technology, the speed of manufacture and processing of substances in the industry has skyrocketed in the past couple of years. In order to benefit from the growth, chemical manufacturers should be ready to incorporate a new mindset and a strategic shift from the current operations. For long the profitability in the chemical industry has swung like a pendulum from good to bad times. However, with digitization and technological advancements, it is expected that chemical manufacturers will be able to gain better profitability, smarter portfolio management, and value capture.     

Chemical Industry Trends

Re-modelling business

The rapidly changing market conditions call for players in the chemical industry to re-invent their traditional practices and do away with obsolete business models. For this, chemical industry companies must identify and keep a close watch on their competitors in the market. Companies in this industry also need to reconsider their market offering based on the existing demand and profitability in a particular market. This will help them to cut down on losses in the long run.

Focus on emerging markets

Until now, only a few top players in the chemical industry were dominating a more significant part of the market share. But gradually there is a visible trend of more number of players entering this market. Therefore, it has become essential for chemical manufacturers to cater to specific needs of customers in different emerging markets to withstand the cut-throat competition.

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Internet of Things(IoT)

Some of the big players in the chemical industry were quick to adopt IoT into their business, but many smaller players in the industry are still not aware of it. How is IoT beneficial in the industry? This technology enables connectivity between equipment and smart devices, allowing manufacturers to track performance gaps in real-time. Given the rate of rising competition, it is high time that chemical manufacturers switch to such smart business to optimize their production systems.

Cyber-security

Though technology is a boon to the industry, it also has several drawbacks like making the company vulnerable to threats from trespassers. Therefore, chemical manufacturers need to provide training and guidance to their technical experts and plant operators about the emerging risks and measures to overcome them.

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strategic business analysis

Transforming the Chemical Industry: All You Need to Know About Combinatorial Chemistry

The magic of automation technology is slowly changing the chemical industry. Two of the recent breakthrough inventions in the chemical industry are combinatorial chemistry and high throughput screening (HTS). Combinatorial chemistry is a relatively new strategy that has been developed over the past few years. It has proved to be highly beneficial in reducing the time for the discovery of chemical substances. How exactly does combinatorial chemistry work, you wonder? In simple terms, it is all about creating a large number of molecular substances and then rapidly testing them for desirable properties.IR_Brochure

How is combinatorial chemistry different from conventional techniques?

The conventional techniques of chemistry are all about one molecule at a time discovery strategy. However, combinatorial technique involves creating a large number of molecular elements in one go. While only a few hundreds of molecules are discovered using conventional strategy, thousands of molecules are discovered using combinatorial techniques in the time frame of a month. Also, what makes combinatorial chemistry more reliable compared to conventional strategy is that the risk of failure is much lower compared to the latter.

What are the benefits of process automation in combinatorial chemistry?

Now that you know how combinatorial techniques are different from the conventional methods in the chemical industry, here are a few advantages of resorting to automation techniques in combinatorial chemistry that makes it a breakthrough invention in the field of chemistry:

  • Fast – The time taken by conventional techniques to produce one compound is the same as the time taken by a combinatorial strategy to generate millions of compounds by process automation. This makes them a much faster method of synthesis.
  • Easier process – The process of identification and purification of the active molecules from a combinatorial collection or library becomes relatively easier with automation.
  • Safer workplace – Combinatorial chemistry and automation technology make the workplace safer for employees in the pharmaceutical industry by making them aware of the potentially dangerous combinations and conditions.
  • High success rate – Combinational strategies that are incorporated with automation technology have a higher success rate compared to the conventional methods

To know more about combinatorial chemistry and its applicationsAsk an analyst

target market analysis

Why Actionable Insights are a Prerequisite in the Modern Agrochemicals Market?

Agriculture in contemporary times is a tough job indeed. As part of a multi-billion dollar industry, the chains of demand and supply must be strategically managed to turn in a profit. All the while, being keenly aware of the variables – unpredictable weather, availability of water, human resources and importantly, the quality of the final outcome. A good harvest is the culmination of an intricate and painstaking dance. And, a good harvest boils down to how well the standing crop has been insulated against pests, bugs, weeds and other such ailments.

The changing face of the global agrochemicals market

Until recently, a string of toxic chemicals was an effective counter against such nuisance as pests, insects, weed and fungal maladies. Insecticides, herbicides, pesticides and fungicides are easily available, cost effective and highly effective. However, their wide and indiscriminate usage has put forth some pressing concerns.

  1. Large scale damage to the local flora and fauna, prompting the governments to clamp up with a series of regulatory and limiting protocols.
  2. Long term usage of chemical deterrents has rendered them ineffective against a more resistant progeny of pests and insects. Naturally, agriculturists have gradually abandoned the usage of such agrochemicals.
  3. A popular wave of health consciousness that has consumers looking for healthier food options. In the wake of this, organic farming and the concept of ‘farm to fork’ have gained rapid popularity.
  4. The counterfeit market for the aforementioned agrochemicals is working overtime as there isn’t an authoritative monitoring of these criminal activities. This severely impacts profitability from the farm.

While the problems are clearly defined, an effective strategy to challenge these concerns could be highly individualized and demand an expert understanding of the local market, the competition and the local climatic and ground conditions. Information is the key here, alongside the need for a quick realignment of core business strategies in line with the emerging market conditions.

Agrochemicals manufacturing: Horses for courses? 

In light of the various acute challenges listed above, agrochemicals manufacturers must adapt or watch the competition overtake them. The solutions are mostly of a pacifist nature- bowing down to the massive demand and finding solutions that are in line with the popular expectations.

  1. Introducing bio-agrochemicals that are derived from plants, bacteria, fungi, and certain minerals and aren’t prodigiously toxic to the local flora and fauna.
  2. Educate and implement the tenets of Integrated Pest Management (IPM) wherein the agrochemical manufacturer and the agriculturist work together to enforce a comprehensive pest repellent system.
  3. Invest in R&D to find newer and safer chemical options that might see an immediate demand right out of the gate. Companies could also merge to offer the agriculture market a wider choice and variety of products.

Predicting future moves today, with spot-on market insights

With a competent understanding of current trends in the agrochemicals market and what that might entail in the near future, Infiniti Research can help your business understand the advantages of innovation and quick action. With actionable insights, your agrochemicals business will be primed for the future, and beyond.

market opportunity

Big Data Promises Big Opportunities for the Chemicals Industry

It has been more than a decade that the chemicals industry has adopted IT and related solutions to keep track of raw material spend, freight, and logistics. Fast forward to 2017, big data and analytics have emerged as vital processes for enhanced business activities, better execution of operations, and improved marketing strategy. Most chemical companies are now looking for comprehensive solutions which bring together data on suppliers, sales & marketing, lab information, as well as inputs on the third parties. Today, major players in the chemicals industry strongly believe that people, process, and technology are not the only pillars of modern business – rather big data and data analytics too have joined this list.

Big opportunities which big data brings to the chemicals industry

From dishing out products in huge volumes to adding a human face to their products and services, the chemicals industry have come a long way in the past two decades. Manufacturers are expanding their product portfolio to cater to the new demands of the consumers, and gain a competitive edge in the global market. Due to these reasons industry experts are looking for ways in which big data will open new opportunities for the chemicals industry.

Improved pricing, smart production, move towards greener industry, and better management of the workforce are some of the block-bluster opportunities which big data has brought into the chemicals industry.

Smart production

Through platforms like Hadoop, big data seamlessly integrates multiple data sources to provide real time information on asset utilization which in turn enhances the operational decisions. Data analytics further helps in monitoring the amount of energy consumed, bring down the volume of waste, and boost the overall ROI. A major area where big data has brought big change is that of product distribution. Distribution optimization is a major challenge for manufacturers in the chemicals industry. Through real-time tracking, big data enables companies to transfer products from manufacturing facilities at the right time to various destinations, thereby bringing down the inventory holding costs. This way by bringing together data from various departments in the chemical industry, analytics helps in making smarter and quicker decisions.

Improved pricing

Pricing in the chemicals industry is a rather complex phenomenon. It is often seen that the factors on which the prices have been announced are based on data that turns outdated in a short span of time. By considering accurate data from a variety of sources, big data helps in building pricing strategies which are highly competitive in nature. There are chemicals companies which employ big data to integrate marketing information with production strategy to initiate better contract negotiations and arrive at competitive pricing. Big data also enables easy revision of existing prices, so that manufacturers can build their procurement strategies.

Enhanced management of workforce

With several companies resorting to employee intelligence and HR analytics to manage their workforce in an effective manner – big data is being employed to gather information from third-party sources, and from front-line managers to forecast workloads as well as measure job satisfaction and employee engagement. It also helps to consider least visible contextual insights to improve the hiring process and improve employee retention.

Big data, therefore, is not just a new technology which is helping the chemicals industry grow – rather it is a force which is all set to reign in strategical changes in the global chemicals industry.

Can Oleochemicals Reduce America’s Dependence on Petrochemicals?

Oleochemicals is one of the best substitutes for petrochemicals and is being widely applied in several industries across the globe. Derived from animal and plant fats, these chemicals and its derivatives have gained popularity due to its performance, functional efficiency, and sustainability. Especially in America, the growing demand for oleochemicals has led industry experts to believe in a decade the country’s dependence on petrochemicals will reduce significantly.

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How Oleochemicals Reduce American’s Dependency on Petrochemicals?

Almost all modern industries are heavily dependent on petroleum and allied products. Petrochemicals are extensively used for fuel production, plastic industry, the medical sector, and fertilizers. Critics are against the use of petrochemicals because when released into the ground, air, and water it can have adverse effects on the environment and human life.

Petrochemicals tend to get absorbed easily into the skin, resulting in allergies, hormonal disorders, asthma, and congenital disabilities. One such petrochemical which is under the scanner is bisphenol A (BPA). Used in many plastic-based products, especially baby bottles, BPA can disturb the hormonal balance and affect the normal growth of the child.

Oleochemicals to the rescue

Though a lot like petrochemicals, oleochemicals are biodegradable, pollution free, and very low in toxic levels. It is already being used in the production of biodiesel, bioplastics, and lubricants. These chemicals are also being employed in the textiles, personal care, pharmaceuticals, and food & beverage industry.

The USA is one of the biggest producers as well as consumers of petrochemicals. Owing to its commitment to green energy and reducing carbon emissions, policymakers in the US are encouraging industries to adopt oleochemicals. Some of the major names in the United States oleochemicals market like Emery Oleochemicals and Vantage Specialty Chemicals already have a significant presence across value chains

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Changes in U.S. regulations and the ban on trans fats, along with tax incentives to encourage biofuel consumption are some of the major factors which have increased the demand of oleochemicals in the United States. According to industry experts, the personal care & cosmetics segment has emerged as a major user of these chemicals and its derivatives. The textile segment and consumer goods industry are other sectors which have replaced petrochemicals with oleochemicals. With more industries switching to oleochemicals, it is very clear that America’s dependency on petrochemicals is sure to reduce significantly.

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