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Chemicals & Process Industries Experts

Eric A. Spiegel Joachim Rotering Ibrahim El-Husseini Nick Pennell Per-Ola Karlsson Richard Verity

Accelerating globalization, high raw material and oil and gas prices, growing competition from Asian players, and increasing merger and acquisition activity are key drivers of change in the chemical industry. Drawn by a strong market potential for chemicals, traditional players are moving into Asia, especially to China, while new Asian entrants are experiencing strong growth rates. The Middle East and Russia, with their cost-efficient natural reserves and abundance of feedstock, are gaining attractiveness for petrochemicals, basic chemicals, and polymers. The challenges chemical companies face in these high-growth regions are not only different from the challenges in traditional markets, but they also vary at different points along the chemical industry value chain.

In traditional Western markets, margins are eroding, in particular because of continuous price pressure, dwindling demand growth, and the lack of “real” innovation. As a result, chemical companies must develop new strategies to increase profitability and take advantage of opportunities in high-growth markets and regions, including differentiating their product and service offerings, revamping their marketing and pricing strategies, and reducing even further their direct and indirect costs. In addition, mergers and acquisitions are regaining importance as a way for chemical companies to optimize their business portfolio and increase market share. Private equity investors are playing an important role in consolidating the market and reshaping the chemical industry by pursuing buy-and-build strategies, thereby establishing focused players in discrete segments of the value chain.

In Asia, the Middle East, and Russia, established and new, often nontraditional, chemical players are seeking growth strategies to leverage market opportunities. Increasingly, they are focusing on efficiency enhancements to optimize the benefit from demand growth and to proactively mitigate margin pressure from rising costs.

Thought Leadership

Getting Customer Segmentation Right in the Chemical Industry The Future of Brazil's Chemical Industry

Across all regions, chemical companies have to cope with increasing raw material and energy costs triggered by rising oil and natural gas prices. Thus they seek new and innovative solutions in sourcing as well as in marketing and sales.

Booz Allen Hamilton’s Capabilities

Drawing on our deep understanding of industry dynamics, extensive experience along the entire chemical value chain, and broad functional capabilities, Booz Allen delivers comprehensive support to the chemical industry. Our global capabilities are equally effective in delivering results that endure in North America, Europe, Asia, the Middle East, and Russia. Working side by side with our clients, we assist with strategy development and execution, transaction support, operational excellence and efficiency enhancement, and innovation management.

Strategy Development and Execution — We help clients build tailored strategies to tackle the full range of strategic and competitive challenges they face. Working with ambition and condition-driven methodologies, our teams help clients inform their strategic debate, envision the future, set clear expectations, and develop and implement an appropriate strategy, such as:

• Growth strategies
• Business portfolio optimization
• Market entry strategies

Transaction Support — Drawing on our proven industry expertise and our functional experience in the support of all phases of transaction processes, we accompany our clients during deal shaping, carve-out, signing through closing, and integration program implementation. Major support activities are:

• Acquisition strategies and target identification
• Commercial due diligence support
• Clean team synergy assessments and “Day One” preparation
• Postmerger integration program definition and management
• Divestiture and carve-out

Operational Excellence and Efficiency Enhancement — We support our clients in the sustainable optimization of their entire cost base with:

• Sourcing strategies for direct and indirect materials
• Sales force effectiveness optimization
• G&A cost reduction (e.g., shared services, outsourcing, offshoring)
• Supply chain optimization, including operating asset effectiveness, production network redesign, and logistics optimization

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