Global strategy, chemical industry

To understand this recent evolution and the perspectives for the chemical industry, it is essential to understand the capital market point of view, which drives the strategies of most global chemical players today. The importance of the shareholder value era for the chemical industry is discussed in the following two chapters. 

Ralf Dingeldein is a consultant based in McKinsey s Asia House office in Frankfurt. He is a core group member of the firm s global chemicals and strategy practices, and has worked in various fields of the chemical industry. His main areas of emphasis within McKinsey are the Chinese market, business strategy, sales and distribution, as well as private equity transactions. Ralf holds a Dipl.-Wirtsch.-Ing. from the TH Karlsruhe and a PhD in business administration from the University of Essen. 

De Bree, Simon (1995) Global industry perspective. Paper presented at the conference on competing in the new Europe strategies for the Central and Eastern European chemical industry. 

To many managers in the chemical industry, these concepts appear too far removed from the very practical challenge of organizing their businesses for optimum effectiveness and efficiency. They are looking for a structure that is both simple and robust, and that delivers their global and regional strategies. 

According to the European Commission s White Vapcr on the strategy for a fiiture chemicals policy, the global production of chemicals had increased fitim Imillion tonnes in 1930, to 400 million tones by die time the White Paper was published in 2001 (EC, 2001 4). The chemical industry in the EU produces about one third of total international chemical output and as such is collectively the largest chemical industry in the world, with an estimate turnover of some 556 billion in 2003 (for the EU 25 counteies) (CEFIC 2004). 

In February 2006, The International Council of Chemical Associations (ICCA) launched the Responsible Care Global Charter and the Global Product Strategy (GPS), marking a renewal of the chemical industry s former commitment. 

All the industry s major players have a global presence, and more than 40 percent of chemical sales are typically outside the companies respective home markets. In such a context, global business divisions allow for coordinated product strategies and customer service across the world s markets. 

Karsten NeufFer is an associate principal at McKinsey and is based in the Berlin Office. He is a member of the global chemicals practice and the Asia House Frankfurt and co-leads the knowledge initiative on Chemicals in China . He has worked in various fields in the chemicals and non-ferrous metals industries, with a particular focus on corporate strategy, organization, corporate transformation, as well as China. He holds a master of science in industrial engineering and an MBA from the University of Chicago. 

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