Chemical Industry Trends 2018 - WorldOfChemicals

Trends in the Chemical Industry

Trends in chemical industry

The chemical industry is very dynamic which will continue to change rapidly in the coming years. Companies related to the chemical industry must adapt swiftly to overcome challenges, maintain a competitive edge and grasp new market opportunities. The convergence of new trends is creating a perfect outburst for the chemical industry, challenging the previous generation’s strategies of companies. In chemical business nowadays, factors such as intellectual property, customer and feedstock proximity, and technology know-how no longer assure a sustainable competitive advantage. Based on global market research, major trends that will drive the chemical industry in the coming years are listed below.

 1. Circular Economy

The scarcity of raw materials is a major factor that must be considered by companies in their strategic planning. Resources are used and disposed of in a traditional linear economy. Whereas in a circular economy, resources are used to their longest extent and at the same time maximum value is extracted from them. At the end of each service life, resources are recovered, and products are regenerated. The circular economy is being adopted at the local, regional and global level due to its role in the reduction of energy and resource consumption.

 2. Digitalization

Recent technological advancements such as in-memory processing power along with the capability of almost unlimited data storage at a low cost provide at low costs offer extraordinary levels of granularity, connectivity, and speed in accessing, processing and analyzing huge amounts of data. The Internet of Things, blockchain and machine learning are also giving impetus to digitalization of chemical industry.


In order to capitalize on competitive and efficiency gains through digitalization, chemical companies need a business program and IT foundation, one which combines a stable core system with an innovative system. Proper integration of these two systems on one platform provides the base to scale innovations swiftly for optimizing business value across the whole company.

 3. Accelerated Globalization

Newmarket players from emerging countries are coming up with innovative concepts, business models and processes. Innovators are rapidly catching up with incumbents in the context of speed and responsiveness through rapid commoditization and shrinking lifecycles. They are developing new formulations, products, and services.


The burden is on chemical companies to find new ways to maintain a competitive edge in the pressurized and dynamic global environment. Many are achieving this through a digital lens by reimagining fundamental business processes. They are making big investments in new digital solutions and applying them in demand planning, sales, and operations planning, supply and response with the goal of having more collaboration, making them real-time ready and better integration within and beyond company boundaries.

4. Merger and Acquisition

In recent years, mergers and acquisitions have been a significant aspect for the growth strategies of chemical companies. Mega deals involving billions of dollars are coming to an end in the chemical industry. With the completion of the last few big deals, companies are now inclined towards smaller divestments and acquisitions that focus on specific portfolio inadequacies and deliver quantifiable results in the short-term and mid-term. The next wave of merger and acquisitions in the chemical industry are expected to be mid-sized companies that would buy a few of the non-core assets of the new mega companies.

5. Emergence of New Business Models

Business models are now emerging around business process automation and operational excellence. With the new digital technologies becoming commercially feasible and scalable, companies can now realize concepts such as “touchless order fulfilment” and “lights out manufacturing”.


For these new business models to prosper, companies would require a solid foundation which includes a 4th generation platform for IT infrastructure, business processes and at the same time a skilled workforce. Internet of Things, machine learning and blockchain won’t prosper in a vacuum. They must be embedded in our thoughts and into our processes. uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X