Digitalization and
Sustainability Beat M&A: Chemicals Top-Trends Shift
Is the chemical M&A race overrated? A recent study shows that
managers identify digitalization and sustainability as the most important
drivers of growth - while doubting the benefits of M&A.
Basel/Switzerland – The majority chemical managers expect their
business to grow in the Europe region over the next five years. At the same
time, however, satisfaction with site conditions in Germany has fallen
dramatically compared to the previous year, with a decline of more than 20%.
The German chemical industry sees digitalization and
sustainability as the most important drivers of growth. By contrast, M&A is
not considered a guarantee for growth. These are the results of a recent trend
study from the consulting specialist Camelot Management Consultants.
The German chemical industry estimates that economic development
in Europe will be positive over the next five years. However, the results also
reflect uncertainty: Compared to 90% in October 2016, only 68% of the
participants rated the site conditions in Germany as “good” or “very good”.
Commenting on the results of the latest survey, Dr. Josef Packowski, Managing
Partner at Camelot, said that: “The significant decline in site satisfaction is
a reaction to the obvious pent-up demand for digitalization in Germany, in
addition to increasing bottlenecks in logistics and transport infrastructure;
in light of the positive growth prospects in Europe, this dissatisfaction will
intensify.”
Digitalization and Sustainability as
Growth Drivers
The chemical industry is currently facing a fourth industrial
revolution. This is also reflected in the opinion of the panel: 76% of surveyed
managers see digitalization as “very important” for the growth and
competitiveness of both their own company and the entire chemical industry.
However, Dr. Sven Mandewirth, partner and chemical expert at Camelot warns
that: “Digitalization and automation are recognized as significant competitive
factors in the chemical industry, but are often not yet implemented. In many
cases, the realization does not go beyond intermittent flagship projects.” A
similarly important driver of growth for companies (68%) and industry (78%) is
sustainability. On the other hand, the survey participants attach less
importance to the circular economy.
Chemistry could
become almost neutral to climate by 2050, as recent studies show. The price
would be, however, enormous: Up to a tenfold of the current investment volume
per year had to be pumped into alternative raw materials and process development.
Is the dream of green chemicals over before it even began? How realistic is the
decoupling of fossil raw materials overall? And what could be done now
Asked about the drivers of organic growth, the surveyed chemical
managers cite “new products” (50%), “new integrated customer solutions and
services” (34%), and “improved processes through digitalization and automation”
(28%). When it comes to the growth-enhancing effect of mergers and acquisitions
(M&A), which can currently be seen very strongly in the chemical industry,
the sector is astonishingly split: 65% of those surveyed believe that M&A
improves their competitive position and leads to more growth. However, 60%
believe that transactions are increasingly focused on short-term financial
performance and unsustainable growth strategies.
Outdated IT and Cumbersome Organization
Inhibit Growth
Asked about internal growth hurdles, the chemical managers
attribute an “outdated IT system landscape” to be the strongest
growth-inhibiting effect. A “sluggish business organization with long
decision-making processes” is considered to be equally severe. In third place
with 25% are “limited production capacity” and “lacking investment funds”. In
terms of external growth hurdles, the study participants cite “rising energy
and raw material costs” (65%),“lack of qualified personnel” (57%) and “EU
regulatory requirements” (54%).
01/12/2018 |
Editor: Dominik Stephan
PROCESS WORLDWIDE
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