Global chemicals industry structure

Our own research into best practice in this area does not surface one right answer, and given the vast differences between chemical companies, we would be very surprised if it did. Nevertheless, one organizational model seems to fit the needs of the chemical industry particularly well in our experience, this is an organization with global business divisions (i.e., product-based business units with worldwide control of all critically important business functions) as the main axle, guided by the corporate center and supported by shared services. About three quarters of the global players in chemicals have adopted this structure. 

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. 

The different naming conventions in the chemical industry often lead to the assignment of different chemical names in different global jurisdictions. Ethyl acrylate is a very common chemical whose name clearly identifies the substance as the ethyl ester of acrylic acid, with the chemical formula C5H8O2, and the structural formula CH2=CH-COOC2H5. Every chemist would recognise this structure, and name it immediately. 

Table 1.2.5 gives the annual global production of important chemicals in 2003. In general, the structure of the chemical industry is characterized by a small number of base chemicals such as ammonia, ethylene, and chlorine, which are further converted into many intermediates such as ethylenoxide, styrene and vinyl chloride and... 

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