McKinsey and Company

McKinsey and Company were engaged to carry out a business review and to examine these options critically. The company s recommendation, based on financial and market assessments, was to move to a strategy of regional membrane cell plants in the three east-coast states, with plant capacity matched to the markets in each state. This meant ... 

What is the market potential Industrial biotech is already 5 percent of global chemical production, and Erickson believes it will continue to accelerate rapidly. McKinsey and Company estimates that by 2010 industrial biotech could be worth 280 billion. 

Berg, A., Hedrich, S., 2014. What s Next in Apparel Sourcing Mckinsey and Company, Chennai. Box, G.E.P., Jenkins, G.M., 1976. Time Series Analysis Forecasting and Control. Holden Day, San Francisco. 

The major drivers of growth in pharmaceutical markets in Africa have included increased disease burdens, particularly HIV/AIDS. The private markets have been expanded by developments in health insurance schemes, and some countries health systems have seen large investments in public health. Political stability and rapid economic development, improving business climate, a maturing regulatory environment and increased confidence in generic products have all also contributed to market expansion (African Union and UNIDO, 2012 Mckinsey and Company, 2013). 

Mckinsey and Company (2013) Pharmaceutical Sector in Africa, presentation at the African Pharmaceutical Summit, Hammamet, Tunisia, September 23. 

Christopher Musso, Jason Grapski and Bob Frei, McKinsey and Company, Old Answers to New Questions Dodging the Obstacles of Plastics Innovation/Modern Plastics Magazine - September 2006, p.l8. 

Period of 4 trading days before announcement and 3 trading days after announcement T Period of 4 trading days before announcement and 40 trading days alter announcement Cumulative excess return of specific company over FTSE Chemical Europe performance "" (Reported annual EPS-consensus forecast EP )/(absoiute value of consensus forecast EPS) Source McKinsey... 

Copeland, T., Roller, T., and Murrin, J., Valuation - Measuring and Managing the Value of Companies, third edition, New York Wiley, 2000 p. 334. Nattermann, P. M., Best practice Best strategy, The McKinsey Quarterly 2/2000, pp. 22-31. 

Fortune 500 survivors 1970-2000, including acquired and insolvent companies Sou rce Compu slat, Fortune Magazine, "Innovation Compass" survey, McKinsey analysis... 

The McKinsey Global Institute has analyzed operational performance improvements in the industry over time, based on an investigation into labor productivity. Betweenl991 and 2003, the average annual growth for German chemical companies was 5.5 percent, in France it was 3.3 percent, 3.2 percent in the USA, and finally 2.6 percent in Japan. 

The increased pressure for sustainable production is also helping to spur the industry s prospects. Two reports - one by the OECD, the other by a consortium of companies, industry associations, the Oko-Institut, and McKinsey - clearly demonstrated that industrial biotech can help create jobs, boost profits, and benefit the environment. 

Biotech may be gaining importance in the food and nutrition sector, but many nutritional ingredients are still produced by chemical synthesis or via extraction for example, carotenoids are currently most competitively produced by chemical means. For vitamin B2, however, the situation has changed completely in the last five years. The traditional eight-step chemical synthesis has been replaced by one fermentation process. This biotech process, which is also practiced by BASF on a large scale, reduces overall cost by up to 40 percent and the overall environmental impact by 40 percent, as has been shown by detailed life cycle assessments. Similar trends have been described for other bio-based processes, indicating that economic and environmental benefits go hand in hand in today s white biotech practice (EuropaBio and McKinsey Company, 2003, DSM position document, 2004). 

A good example of a white biotech process in the pharmaceutical area is our route to the antibiotic cephalexin, practiced on a large industrial scale for several years now. By advanced enzyme and metabolic engineering we were able to replace the traditional 10-step, mainly chemical synthesis (Fig. 29.3A) by a fermentative route followed by two mild enzymatic steps (Fig. 29.3 B). The white biotech process has been shown recently to use far less energy (-65%), less input of (harsh) chemicals (-65%), is water-based, generates less waste, and is very cost-effective (-50%) (Bruggink, A.). Again, this is a bio-based process where environmental and economic benefits go hand in hand and for which there is no competitive chemical alternative (EuropaBio and McKinsey Company, 2003 DSM position document, 2004). 

The shift from bio-based specialties to commodities is already visible in the marketplace with biopolymers made from corn. The first example is NatureWorks from Cargill, which is made from corn sugar-derived lactic acid. As in the biochemicals examples described above, the environmental benefits are eye-opening NatureWorks already requires 25 to 55 percent less fossil resources, and it is planned to replace fossil resources completely in the next four to six years (Euro-paBio and McKinsey Company, 2003). Other high-potential biomaterials are a polymer based on 1,3-propanediol from DuPont and Genencor (Sorona ) and... 

Source ACC, Import and Export Database, Global Insight, China Chemical Companies Database (COCO), McKinsey analysis Fig. 32.1 Strong growth ofthe Chinese chemical industry. 

Rolf Bachmann is a principal in McKinsey s Zurich office, having joined the firm in 1992. He has served various companies in specialty chemicals, pharma and life sciences, and the basic and advanced materials industries, and has been involved in several industrial biotechnology projects. He is a leading member of McKinsey s chemicals practice and leads the practice s industrial biotech initiative. Rolf has an MBA and a PhD in economics from the University of Zurich. 

Fig. 2.5 Short and long term portion of share price for selected companies Including acquired pharmaceutical business of Monsanto Source Datastream, McKinsey analysis...

Fig. 16.8 Comparison of total shareholder returns and market/invested capital ratios for less cyclical and more cyclical chemical companies, 1987-98 Source McKinsey...

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