Chemical companies have for the past few years experienced slower economic growth globally. In part, it emanated from trade disruptions and weakening end-market demand from crucial industries such as the construction and automotive sectors. This general decrease in demand adds to an oversupply in commodity chemicals, leading to lower pricing, which makes it much harder to achieve organic growth.
With the industry’s growing changes, it is vital to develop new strategies to become more competitive in the increasingly challenging sector. Analyzing the current market and integrating digital and sustainable approaches are among the strategies that will put you in a better position for organic growth. Here are some of the helpful strategies.
Balancing Product Pricing and Volume
Chemical manufacturers need to appreciate that selling high volumes of chemicals doesn’t necessarily mean that they will benefit from increased profit margins. That is because this industry has a structural weakness that limits high demands from various consumers. The need for conventional chemical products has reduced apart except for renewable products such as biopolymers.
Therefore, shifting your focus from increasing your product volume to improving the pricing will be more beneficial. For instance, focusing on improving your Benzyl Alcohol pricing will significantly improve your profit margins. Pricing excellence is, therefore, a powerful strategy.
Digitization has become a panacea in various businesses in all sectors of the economy. Digitization is integrated into the various manufacturing and business processes in the chemical industry. This flexibility has allowed for companies to progress and not just be product suppliers. Other aspects of digitization that have led to significant improvements in the industry, especially in marketing, have been artificial intelligence and machine learning.
Apart from helping in the workforce’s downsizing to a more manageable size, these two put you at an advantage over your competition. They are useful in the entire operations process, localized control, and redesigning work strategy.
Giving your Product Portfolio a New Face
Another powerful way to remain competitive and relevant in the chemical industry is to expand and revamp your product portfolio. If you are not performing well, entering into mergers will give you a better position in this competitive industry. For your portfolio to attract more clients, you need to provide them with a clearer picture of your core values and current operations. Remember also to include your plans as a business.
If you do it well updating, your product portfolio will allow you to improve your overall profitability. It will also enable you to move up into more lucrative areas of chemical manufacturing.
As a chemical company, your goal should be to focus on commercial growth in all your industrial and economic cycles. This focus should not change whether you are a large or smaller company. Another thing that will allow you to weather challenges and have a competitive edge over your competition is integrating sustainable development and growth goals. Follow these tips ad your business is going to become more profitable.