The worldwide growth in the chemical industry that began in 2004 has continued in 2006.
Although the cost of raw materials are still high, it had decreased somewhat and manufacturers were largely able to keep their product prices at reasonable growth levels.
Volatility in the financial markets and credit crunch are fuelling fears that the chemical industry will hit downturn sooner than expected.
However, some people believe that the industry is in a super-cycle because of the high growth in India and China.
Despite the increase in worldwide demand for all types of chemicals, rising costs and more demanding customers are putting the pressure on the profitability of many chemical manufacturers. They are compounded by the increased breadth of product categories, which are forcing companies to dedicate increasing amount of resources to innovation to maintain market share and profit from new opportunities.
The emergence of BRIC (Brazil, Russia, India and China) markets onto a global stage has placed significant pricing and supply chain pressure on the established chemical manufacturers in North America and Western Europe. Chemical manufacturers in the developed countries are setting up manufacturing facilities, acquiring local assets, and seeking joint ventures and partnerships with local manufacturers.
Leading chemical manufacturers are coming up with effective strategies in today’s highly competitive global marketplace, they include:
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Offering New and Improved Products
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Offering Quality Products
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Offering Customized Products
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Improving Customer Service
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Establishing Large Integrated Manufacturing Sites
In addition to the above strategies, chemical manufacturers should enhance their supply chain and business processes. Companies need to improve their manufacturing processes, which include better engineering, improved automation, closer integration of manufacturing and business systems, and better utilization of manufacturing assets.