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Manufacturing Technology Insights | Thursday, July 01, 2021
Rising quality of life and growing middle-class in developing economies propel ongoing strong demand for chemicals as more end-users buy appliances, consumer goods, automobiles, and other products that require chemicals and plastics.
FREMONT, CA: The chemical industry is undergoing significant transformation and reorganization. This movement provides an opportunity for industry leaders to embrace tremendous changes to reinforce their companies' positions and increase market share.
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The chemical industry is currently defined by four broad trends, affecting different aspect of business, from operations to production and compliance. They are as follows.
Mergers and acquisitions: Over the last few years, significant consolidation has occurred in the form of numerous mergers and acquisitions. As a result of slow overall industry growth and a desire to consolidate resources and capabilities in the fastest-growing areas, M&A is also driven by growing pressure to raise the resources needed for digital transformation. Mega fusions radically alter the industry's top, which has not escaped the attention of farmers, lawmakers, and regulatory bodies.
A new regulatory environment: For the first time in decades, governments and regulatory bodies worldwide are overhauling chemical regulations. Environmental and industry groups agree that these changes could herald a period of détente between the chemical industry and its regulators in the coming years. However, in other parts of the world, the relationship between industry, activist groups, and regulatory bodies continues to be tense.
Investment: After decades of being overshadowed by emerging markets, North America experienced a significant wave of investment in new multibillion-dollar manufacturing facilities by several chemical manufacturers. The considerable size and strength of the regional market and favorable political and regulatory environments in American states with significant chemical manufacturing segments contribute to this growth.
Digitization: Demand growth and increased competition have increased the pressure on all chemical manufacturers to adopt advanced technologies and restructure their operations and structures. Through advanced technology, manufacturers can achieve increased efficiency, safety, and reliability, resulting in cost savings. Additionally, these transformations enable new business models that bring chemical manufacturers closer to their suppliers, direct customers, and even end customers.
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