Speed may be the future of the chemical industry

The Chemical Industry is undergoing a digital upheaval

"Speed becomes a competitive advantage" is the title of an interview in the trade magazine Chemie Technik in April 2022 with Tobias Gehlhaar, Managing Director of the Chemicals, Basic Materials and Utilities Division at Accenture on a study they prepared on the future of the chemical industry.

Chemistry is undoubtedly one of the great leading industries in Germany. It's really about the heavy industry and, accordingly, the challenges are similar. "The exciting thing for me here is especially how companies from this sector are now increasingly approaching topics such as digitalisation and AI and adopting new technologies," says Gehlhaar, adding, "I believe that it is necessary for companies in the current phase of upheaval to place one or two 'bets' on the future."

He sees one problem with the issue of fuel procurement and energy efficiency and believes that we will see much more cooperation between the two areas in the future. One stumbling block here, he says, is that German industrial companies in particular are very reluctant to enter into partnerships at eye level. The idea that you alone have to determine value creation is in part very deeply anchored in corporate cultures.

Where will it go in the Future?

There are certainly examples in recent economic history that show us where the journey could go, argues Thomas Gehlhaar: "In the financial sector, for example, we have seen that some innovations in this area have not taken place with the big players, but with small start-ups, the so-called fintechs".

Such a development is also possible in the chemical industry, especially against the backdrop of the emerging distortions in the energy sector. The idea that assets protect a company in the long term is wrong. As soon as innovations become established, there are two possibilities: Either the innovators do not manage to scale themselves, in which case the innovations spill over to established companies and they can use them or market them. Or else, new players emerge - as in telecommunications and technology, for example - which then "steal" a substantial part of the margins from the big players.

How the Chemical Industry Should Reposition Itself

New regulations and rules, for example in the field of energy transition, will make speed and readiness for change a competitive advantage in the coming years. If it is then soon no longer primarily about production capacities and quality - all things: in which German industry is traditionally strong - then this will become a problem, says expert Gehlhaar.

In the end, it's a question of how quickly a company is able to move from an idea to its implementation. They should take a self-critical look at the question 'where do we stand'? This is then about different release levels, hierarchies in the company and so on. An honest stocktaking is a very helpful measure here, Gehlhaar emphasises.

If companies only think in terms of their own product lines and develop them incrementally, the next disruption that completely turns the market upside down will not emerge. And that may mean making investments in an area for which there is currently no market at all.

Original source and quotations: Trade journal Chemie Technik – the original interview was conducted by editor Jona Göbelbecker.

Photo: Yellow Boat

 

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