Continuing to operate in the same way as for the past 20 years, that is to say, cutting costs to remain competitive will not be enough to secure the future of European chemical companies. This will require a transformation and redefinition of the industry, as well as rapid execution and agility. We look at what European chemical companies can do in the short, medium, and long term to remain competitive.
Echemi-- The name originated from the abbreviation of “E-commerce of chemical”. Echemi is a chemical supply chain service company headquartered in Hong Kong, providing chemical raw materials supply, research and analysis, marketing, distribution, logistics, and E-commerce.
short-term
European chemical companies can take immediate steps to address efficiency and productivity issues while preparing for major shifts in the medium to long term.
Updated features are excellent. Gas prices are expected to fall by 2026, but even then prices are likely to remain above historical averages. In this context, European businesses would do well to be at the forefront of efficiency and effectiveness to create a solid and stable basis on which other initiatives can be built. Our experience has shown that chemical companies can save up to 10 to 20 percent of their energy expenditure and 10 to 40 percent of their energy use while achieving up to 10 to 20 percent throughput improvements and 10 percent yield increases. Achieving these goals requires a rigorous focus on improving performance and adopting the latest approaches to digitalization, analytics, and enterprise agility.
Strengthen the resilience of physical supply chains. Safe operation is of Paramount importance. This includes securing access to energy through a combination of contracts and physical hedging, as well as access to raw materials and identifying key alternative raw materials that may become scarce or become scarce.
Review existing strategies in light of changes in the current value pool. Changes in energy supply, sustainability regulations, global supply chains, and other factors could spur significant shifts in the value pool. Decarbonizing electricity, low-carbon mobility, recycled products and packaging, and low-carbon agriculture and food supplies are just a few of the new value pools. We estimate that these sectors will be a $500 billion to $1 trillion market by 2025, and each will likely require new chemical products. Companies can consider reassessing their product portfolio, what to keep, what to decarbonize, what to relocate, what to sell, and reassessing strategic options related to these new growth levers in Europe.
Identify new business development opportunities. Developing new sustainable solutions requires not only the decarbonization of existing assets but also the establishment of new businesses, such as recycling or green and blue businesses in biological or hydrogen-based feedstocks. Scaling these businesses will take time, and the full top and bottom effects will only be felt in the medium to long term. It will therefore be important to identify opportunities early, develop business blueprints and design ambitious expansion plans.
