REACTION Chemicals Magazine – Edition 24 | KPMG | AU
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REACTION Chemicals Magazine – Edition 24

REACTION Chemicals Magazine – Edition 24

Published three times a year, Reaction magazine covers the key issues impacting the chemical and performance technology industry.

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Associate Director, Sustainability Practice and Sector Lead for the Chemicals Industry

KPMG Australia

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In this edition, we explore geopolitical trends and their impact on global chemical companies, synergies within the industrial gases market, an outlook for the US chemicals industry and a look at innovation with AkzoNobel.

Adapting to a changing geopolitical landscape

Geopolitical uncertainty is on the rise. Volatile oil and gas prices, shifting alliances in the Middle East, shocks to the European Union (EU) such as Brexit, the expansion of China, the Trump administration in the US, and the rise of nationalism and opposition to free trade – all these developments and more are increasing stress levels across the business world. Traditionally, the chemical industry has been more reactive than proactive about dealing with geopolitical disruptions. However, chemical companies would do well to consider appointing a Chief Geopolitical Officer (CGO) to help them address uncertainties in an increasingly turbulent world.

Synergies sought in M&A by industrial gas players

Major industrial gas manufacturers have recently been focused on optimising and strengthening their positions in core markets, both geographically and by business unit. M&A activity in the sector has reflected this and has been aiming at driving synergies to leverage innovation and technology, improve service, reduce distribution costs, increase efficiency and allow greater access to core markets, as well as divest any non-core businesses. This is a familiar trend that has been seen across the chemical industry.

Despite uncertainty, optimism for US chemical companies

Uncertainty is the only certainty for today’s US chemical industry. A new administration in Washington, DC, is attempting to loosen regulations, change tax laws and adopt new federal policies designed to promote business growth. At the same time, this administration has suggested that increased tariffs and a renegotiation of international trade agreements would benefit the US economy, even though trade barriers might curtail export/import growth in US chemicals. Nevertheless, the US chemical industry remains greatly favored by low feedstock and energy prices, a strong domestic economy and a business-friendly government agenda, all of which justify continued optimism about industry revenues and growth.

A unique approach to innovation with AkzoNobel

In January 2017, AkzoNobel launched Imagine Chemistry (www.imaginechemistry.akzonobel.com), a strategic initiative developed in conjunction with KPMG to help solve real-life chemistry-related challenges. A startup challenge for the global chemical industry is at the heart of this initiative. This year’s response has been outstanding, with hundreds of ideas submitted by numerous startups along with scientists, research groups and students. In June, the finalists were announced. Each one will work closely with AkzoNobel in a unique approach to innovation based on openness, shared intellectual property (IP) and a highly collaborative process for effective development.

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