15 March 2013 09:28 [Source: ICB]
There are many ways you can grow in chemicals, but achieving anything like the growth rates of the past has become increasingly difficult.
In the short term, chemical companies face the prospect of slower demand from China, lacklustre growth in the US and extreme weakness in Europe.
Over the next decade or so, increased capital spending will go a long way to help provide the means to do the job - it has been constrained, industry-wide, since the 2008-2009 crash. But chemical firms, quite rightly, eye closer customer collaboration and the sort of research and product development that will allow them to spread their bets.
Investing in the right sort of research is likely to pay off in the long term
Where do you build your next plastics or plastics intermediates plant? You need to balance feedstock and other costs with demand. But to make real inroads into increasingly sophisticated markets, you need to be at the forefront of developing better, lighter, tougher, more easily processable and recyclable materials.
Examples of new product developments abound as chemical companies push the envelope of materials processing and design. Such progress sometimes involves new chemistry, but also, importantly, research at the interfaces between traditional scientific disciplines.
Given increasingly important links between chemical producing companies and customers operating much closer to the end-use consumer, innovative thinking in a very broad sense - from molecule to product design - is key.
Illustrating what can be done, BASF has launched a new advanced materials collaboration initiative with leading universities in the US that will create about 20 new post-doctoral research fellows.
Working with Harvard University, the Massachusetts Institute of Technology (MIT) and the University of Massachusetts (UMass) Amherst, the aim is to jointly develop new materials for the automotive, building and construction, and energy industries.
The research collaboration will involve chemists, physicists, biologists and engineers with know-how in different industries, BASF says.
The trick will be to turn academic research into technically feasible products and processes.
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