Growth through innovation in a transforming world
This new Deloitte study in collaboration with VCI shows how the chemicals industry is undergoing a huge transformation, where digitalization and the circular economy play a key role. The study also identified 30 trends which will be of importance to the chemical industry until 2030 with a focus on the key market in Belgium.
Innovation champion. Strong exporter. The chemical industry in Belgium is a strong sector. But can this be sustained?
The competitive environment in the chemical industry is in transition; producers in emerging and resource-rich countries are expanding their capacities and extending their focus to specialty chemicals which have previously often been supplied by Belgian exports. Old growth engines like globalization, specialization and focusing on the core business have reached their vertex. Additionally, new technologies are changing everyday life and the competitive environment deeply. Digitalization is increasing the pace of change in all industries and advances in biotechnology and additive manufacturing are changing the base of business in the chemical industry. Furthermore, the paradigm shift in demand structures and society´s objectives has long started. Increased demand for resource efficiency and environmental protection has had a tangible impact on customer preferences. The chemical industry faces fundamental challenges.
The study Chemistry 4.0 identifies 30 trends which will be important to the chemical and pharmaceutical industry until 2030. The drivers of those trends were analyzed and their expected impact on the chemical and pharmaceutical industry assessed. On the one hand, those trends will result in incremental innovation that improves already existing solutions. The success model of the established chemical players will continue to offer growth opportunities for those trends. On the other hand, a majority of these trends have a disruptive character for the process technologies, composition of product portfolios, and business models for the chemical industry. Those trends are more often catalyzed by governmental targets and societal goals than they are driven by new technological possibilities.
The answers for those big strategic and structural challenges for the chemical industry lie in the digital transformation and circular economy, short in the era Chemistry 4.0. The experts of Deloitte explain the changes and outline the necessary transformation for the sector and for the companies.
The chemicals and pharmaceutical sectors in Germany are faced with strategic and structural challenges. Disruption in the chemical industry is intensifying as the world becomes digital and strives for sustainability. Products are digitally complemented, linear supply chains are becoming complex economic networks, the recycling of materials and molecules is becoming more important. The industry is entering a new phase with Chemistry 4.0., which requires new business models.
Digital business models
Digitalization allows chemical companies to collect extensive data which can be evaluated and utilized to improve operational processes and build new business models. This digital transformation of the chemicals sector can be split into three categories:
- Transparency and digital processes. These involve the utilization of the comprehensive process data available within the organization to increase efficiency of the largely unchanged manufacturing processes and business models. Automation of manufacturing process is one area where such data is being used.
- Data based operating models. These models utilize operational big data, external data and advanced methods of analysis for better decision making and increasing efficiency. The chemicals industry is being driven by predictive maintenance, networked logistics and the application of concepts from virtual reality.
- Digital business models. These models replace the existing processes and business models and the products and services are digitally augmented to increase customer utility. Additive manufacturing in the field of agriculture is one example of such a business model.