As a key cyclical industry, chemical companies have their hands full with a number of key issues. The current economic environment has created extreme market volatility over the past two years. With declining orders, executives are searching for new ways to mitigate losses while eying new avenues for growth. Additionally, the highly competitive industry has been consolidating at a rapid pace to expand product portfolios and reduce aggregate unit costs. As the boundaries between chemicals and biotech continue to blur, strong competitive positions will be the key to future success.
As a consequence, chemical companies must improve their competitive positions. In addition to seeking inorganic avenues for growth, industry players need to focus on extracting greater value from operations to mitigate downside profitability risk and free capital for new investments. Specifically, industry players need to focus on several key programs:
- Productivity improvements including manufacturing footprint optimization, operational efficiency improvements and supply chain strategy
- Cost structure improvements through overhead cost reduction initiatives, procurement improvements and outsourcing strategies
- Innovation and new product development strategy
- Cash flow management including working capital improvements
- Revenue enhancement through growth strategy, marketing strategy, pricing and sales and channel management
- Organizational, financial and IT restructuring programs
AlixPartners is ideally positioned to assist chemical industry executives with these key programs to support near term profitability and position the organization for future success. Our portfolio of services in business performance improvement including assertive cost management and top line growth strategies are targeted to address current industry issues.