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According to China’s lunar calendar, this year is the year of dog, but for the chemical industry, 2018, known as the year of the tiger, may be more appropriate because it is changing stripes.

This year, we saw a sustained shift in supply centers due to the rise of shale gas in the United States and China’s shift from coal to olefins. Demand centers are changing as middle class growth in Asia Pacific and Latin America is growing rapidly. The accelerated globalization of the chemical market is one of the four trends that we believe will affect the chemical industry in the remaining period of 2018 and beyond.

1. rapid globalization

As part of this rapid globalization, new market entrants – from emerging countries and neighbouring areas of supply – are emerging in innovative business models, concepts and processes. In turn, as innovators catch up with or exceed existing manufacturers in developing new products, formulas and services, this also promotes the shortening of product life cycle and the rapid commercialization of products.

In such a dynamic and stressful global environment, chemical companies have the responsibility to explore new ways to maintain competitive advantage. Many companies are reinventing the basic business process through digital lens to achieve this goal. They are investing heavily in new digital solutions and applying them to areas such as sales and operational planning, demand planning, supply and response, with the aim of being prepared, more collaborative and better integrated with the entire ecosystem – both within and outside the company.

2. circular economy

The rise of the circular economy is another trend worthy of attention in 2018 and beyond. Shortage of raw materials is a reality that chemical companies must consider in strategic thinking. So is regulation. While efforts are being made to reduce material, energy, resource consumption and waste and emissions, regulatory requirements are rapidly expanding their impact at the global, regional and local levels.

To sit in the driver’s seat to cope with stricter regulation, chemical companies are expanding their ecosystems and building end-to-end “cradle to cradle” methods. As companies like safechem Europe GmbH have shown, these approaches are both competitive and compliance related. Safechem Europe has developed a sustainable solution for high precision metal surface cleaning and dry cleaning applications using chlorinated and non chlorinated solvents, in which high quality is necessary. Here, the solvent is managed in a closed cycle without any release to the environment.

3. digitization

The trend of digitalization in chemical industry is closely related to the emergence of globalization and circular economy. This year, a wave of massive digital innovation has not reached its peak. Recent technological advances, such as memory processing capabilities and almost unlimited low-cost data storage capabilities, provide unprecedented connectivity, granularity, and speed for accessing, processing, and analyzing large amounts of data.

Internet of things, machine learning and blockchain are also promoting the digital movement of the chemical industry. Big companies like BASF are using the Internet of things to improve the efficiency of engineering and maintenance processes throughout the asset life cycle, while increasingly relying on machine learning to match invoices and using blockchain technology to manage the supply chain more effectively in a “smart tray” way.

In order to make full use of the potential huge efficiency and competitive benefits brought by digital solutions, chemical companies need an agile business process and it foundation, a system combining stable core systems – a “recording system” for daily affairs, including real-time insight and decision support – through “innovation system”, organizations can use external data to develop rapidly New business processes, even new business models.

4. new business model

Digitization does help the emergence of new business models, which is another key trend in shaping chemical business in the foreseeable future. The company’s performance in the future will depend to a large extent on their strategic agility. They need to quickly change the ability of the product and service mix to respond to dynamic market conditions and the needs of changing stakeholders. D ö hler is one of the chemical companies that have shown this agility in a wave. D ö hler is one of the most respected food and beverage companies in the world, and one of the most innovative companies.

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