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Reaction: Five Trends That Will Shape The 2021 Chemical Industry
Reaction: Five Trends That Will Shape The 2021 Chemical Industry
Reaction: Five Trends That Will Shape The 2021 Chemical Industry
2
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of ways to maximize value in preparation for sale— Action steps
to private equity investors, corporations, or both. — Assess whether COVID-19 showed you to be
Action steps under- or over-exposed to certain segments.
— Assess noncore assets for possible spin off—are — Determine whether you would benefit from an
you the best owner for each individual increase in portfolio diversification to protect you
asset/group of assets? from potential future external shocks and
— Target acquisitions and think like an activist: (1) become more resilient.
diversified portfolio and underperforming — Continue to improve operational performance via
business units; (2) underperformance compared cost reduction, a better understanding of
to peers; (3) value erosion due to unsuccessful customer and product profitability, efficiencies
M&A. captured through automation, restructured
— Plan and execute better separation and executive compensation, reconsidered pricing,
integration by avoiding the three areas that tend the exploration of new markets, etc.
to destroy more than 50 percent of deal value: (1) A look ahead
lack of execution; (2) organizational The global chemicals and performance technologies
confusion/disruption; and (3) information industry has its work cut out if it’s to rebound from
technology systems disruption/issues. the most disruptive year in memory. The
encouraging news is that there is a defined path
5. Diversified portfolios forward. By keeping these five trends at the
Historically, many of the biggest chemical forefront of your strategy, your company will be well
companies have been diversified—typically as a positioned to promptly evaluate and respond to new
result of past M&As, although over the past 10 opportunities…and help make the world a better
years, there has been pressure to restructure place in the process.
portfolios to focus on fewer, core businesses— KPMG Global Energy Institute
much of this exerted by activist investor pressure in
The KPMG Global Energy Institute (GEI) is a
the U.S. However, during the pandemic, those
worldwide knowledge-sharing form on current and
companies that were focused on the “wrong”
emerging industry issues. Launched in 2007, the
segments of the market were those that suffered
GEI interacts with over 30,000 members through
the worst during the crisis
multiple media channels, including audio and video
Learning from the lessons of 2020, it’s a strategic webcasts, publications and white papers, podcasts,
imperative for all chemical companies to actively events, and quarterly newsletters. Subscribe today
assess their portfolios and determine whether a to begin receiving valuable insights covering critical
change in direction is required. Diversification should business topics and industry issues by visiting
no longer be a dirty word in the industry—as long as read.kpmg.us/gei.
diversification doesn’t become an excuse for lack of
For more information, please visit:
focus.
www.kpmg.com/chemicals.
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavor to provide accurate
Gillian Morris and timely information, there can be no guarantee that such information is accurate as of the
Principal, Advisory, Strategy date it is received or that it will continue to be accurate in the future. No one should act upon
such information without appropriate professional advice after a thorough examination of the
KPMG in the U.S.
particular situation.
© 2021 Copyright owned by one or more of the KPMG International entities. KPMG
International entities provide no services to clients. All rights reserved. The KPMG name and
www.kpmg.com logo are trademarks used under license by the independent member firms of the KPMG
global organization. NDP162566-1A