Chemical companies must plan for success and unforeseen challenges

Our industry outlook series, covering oil, gas and chemicals; electricity, utilities and renewable energy; and industrial products and buildings, assesses the industry landscape to help executives better plan for success and unforeseen challenges.

Looking for opportunities in uncertainty: interpreting the trend of 2021

The great changes in 2020 inevitably shape the trend and Prospect of 2021. In 2021, the leading fields that stand out in various industries include: increasing dependence on digital technology; growing concern about facing further trade problems; looking for new growth markets or applications; and making the supply chain more robust and flexible by means of “backflow”, “nearshore” or diversification to new fields and suppliers.

This pandemic has accelerated the dependence of various departments on digital technology. In the face of low oil prices and layoffs in oil, gas and chemical companies, remote monitoring and increasing analysis help to open up new ways of cost saving. For smart manufacturers, digital technology helps improve the safety of workers, promotes the development of the ecosystem, and brings measurable benefits to manufacturers. In the field of electric power, public utilities and renewable energy, the increasingly important role of distributed energy in power grid promotes the development of digital solutions.

The dual impact of trade tensions and the epidemic has led to disruption of global supply chains, which has prompted most companies to assess changes in their supply chains. Some chemical companies have diversified from overseas suppliers, replacing them with partners closer to home. In addition, there is growing concern that key infrastructure, such as the U.S. grid, depends on overseas suppliers.

Although these common trends help shape our outlook for the coming year, it is worth noting that changes in final market demand are important in determining the company’s growth strategy. The business of health and safety equipment manufacturers has grown unexpectedly, while other manufacturers, such as commercial aircraft manufacturers, have been hit by the recession, resulting in less travel. Similarly, demand for chemical companies that provide inputs for cleaning fluids and personal protective equipment is growing, while demand in other end markets is slowing sharply. Moreover, growth will not return to its previous level before a better understanding of New Coronavirus’s development trajectory.

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