Global chemical CEOs plan aggressive R&D spending - PwC survey

27 January 2010 19:44  [Source: ICIS news]

HOUSTON (ICIS news)--The global chemical industry plans to be more aggressive in research and development (R&D) spending over the next three years than all but one other sector, US accounting firm PricewaterhouseCoopers (PwC) said on Wednesday.

In a survey of 1,198 global industry leaders - including 46 chemical chief executives - 65% of chemical chief executives said they planned to increase their R&D expenditures in that timeframe, higher than all other sectors except entertainment and media (at 74%).

Moreover, 30% of chemical CEOs plan to make “significant” increases in the amount they invest, PwC said.

Likewise, 83% of chemical chief executives plan to spend more on leadership and talent development, with 30% anticipating spending significantly more.

On the global merger and acquisition (M&A) front, the number of chemical companies engaging in cross-border deals is “substantially higher” than other sectors, PwC said.

Overall, 33% of chemical executives surveyed have completed at least one such deal in the past 12 months and 46% plan to do so in the next year, according to the survey.

Of those deals, a majority appear likely to happen with Asian operations. Over the next year, 84% of the chief executives said they anticipated doing more business in Asia, while only 52% predicted more business in North America.

While R&D and M&A spending may increase, costs are likely to be cut in other areas to compensate. Of the chemical executives surveyed, 87% said they aimed to invest more in cost-cutting initiatives over the next three years.

Also, 76% said they would invest more in upgrading strategic technological infrastructure in order to facilitate modern manufacturing and logistics processes.

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By: Ben DuBose
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