CHEMICAL INDUSTRY
Compiled by Dona Senara
GOOD CHEMISTRY WORKS!
Chathura Piyasekara offers scientific insights into the chemical industry
Q: How essential is R&D in the framework of the chemical industry?
A: Research and development is important for any industry to grow as it provides strength to foundations, and clearly sets the direction for future business activities.
Chemical production is a multimillion dollar industry with a complex supply chain ecosystem. It’s one of the largest industries with a global impact on sales and distribution in terms of nutrition, agriculture, pharmaceuticals, construction and so on.
There are a number of benefits when investing in R&D that go beyond innovation.
The industry is gradually evolving towards ‘green chemistry.’ And consumer demands are developing and expanding reflectively so that the creation of innovative products not only adds new revenue streams but also improves brand visibility, and opens avenues for collaboration.
Indeed, the industry is complex and requires high levels of efficiency. It’s always subject to restrictions and regulatory controls due to the nature of products.
So R&D enables compliance with the necessary standards.
Q: What is your take on innovation in the industry in terms of marketing?
A: Innovative marketing focusses on the dynamics of a business world that’s rapidly changing and expanding; it goes beyond the concept of an idea or a new form of technology. Innovation and marketing work together to achieve entrepreneurial success, and one can’t exist without the other.
Social media is the present-day frontier for customer engagement and interaction. It includes conducting market research to trace customer needs, behaviour and trends, and then developing changes in production design, launching new products, arriving at a competitive price and promoting the brand.
However, the chemical industry has not been a forerunner as such in embracing social media. Chemicals and chemical-related products are not fancy consumer goods. Instead, they bring to mind issues such as complexity, safety and environmental hazards.
Q: How would you describe competition in this market – and what strategies do you employ to stay ahead?
A: A well-defined marketing strategy is the key to business survival because it helps you stay ahead of the competition in increasingly crowded markets.
Strategies include absorption of digitalisation, revamping portfolios, evolving towards greener chemistry and developing customised chemical solutions, while maintaining impeccable quality and standards.
All these factors play an important role in a competitive industry where products are similar in nature.
The pace will soon be considerably quicker for the industry, given changes in the economic structure, market uncertainties and hyper-competition between the players. Therefore, only the fittest will survive in the chemical industry.
In a fast-paced economy, digital platforms offer an opportunity for new entrants that are entering the chemical industry and its market segments. These enable wider and more efficient market access – even for small and medium-size customers in the market. At the same time, distributors of chemicals are trying to digitalise their business models to increase efficiencies.
By doing so, chemical businesses are gaining competitive advantages in the market. The prerequisite is to face critical business challenges in a competitive world and build brands globally.
Q: Could you outline the most pressing challenges the chemical manufacturing industry is facing today – and how these can be overcome?
A: A raft of powerful and structural challenges to the chemical industry has surfaced, partly because of the pandemic and also the prevailing socioeconomic crisis.
While the industry has already had to navigate product commoditisation, shifting consumer attitudes, regional preferences and regulatory changes over many decades, the dynamics today are unique and potentially more disruptive than ever before.
The lack of proper technology has directly affected chemical-related industries – and resulted in less value additions and a distressed value chain.
Following the pandemic and the ongoing economic predicament, the industry is experiencing global issues such as a shortage of raw materials, unexpected price fluctuations and supply chain disruptions, which are adversely affecting manufacturing industries and causing them to lose a considerable share of the market.
On the plus side, chemical companies can find some comfort in the potential for new, emerging and lucrative demand pockets – such as renewable energy, electric vehicles and more.
Whether the industry can take advantage of these new markets and monetise innovation will depend partly on how much it embraces digital solutions, the latest technologies and state-of-the-art processing facilities.
Moreover, it would enable the industry to align with advanced production planning systems, and optimise research and forecasting to manage price hikes, unstable markets and increasing customer demands while maintaining high operational productivity amid various regulatory controls of the supply chain… without buckling under the pressures it faces at this time.
