Margins and volumes are under enormous pressure in most chemical markets. And as noted in the 2009 Outlook, companies need to develop an imaginative response to the pricing issues that they face. They also need to maintain faith in the future by continuing to innovate.
Thus the blog was pleased to be invited to Dow Corning's (DC) briefing today, which announced a major roll-out of their online Xiameter marketplace for silicone-based products. This is planned to see 300% growth in volumes, by exploiting the ability to drive efficiency savings via the web.
As Klaus Hoffman, DC's President for W Europe, explained, they are not trying to capture all the benefits for themselves, but are aiming to share them with customers - who are also under similar margin and volume pressure in their own markets. A number of new innovations have therefore been introduced to facilitate this:
• Transparent pricing, showing price tiers by volume offtake
• Flexible credit policy by order - with discounts for early payment
• Long-term contract options, as well as spot pricing options
The number of products available via Xiameter will be doubled to 2100. And the order process has also been speeded up, to take just 2 minutes from log-on to confirmation.
Equally, John Lyon, DC's director for geographic development, emphasised that the growth of Xiameter will free up the company's resources, enabling them to reinforce their drive for innovation in their non-commodity business. This will particularly focus on the opportunities offered by long-term megatrends, such as sustainability.
Taken together, today's announcements seem to offer a potential win-win-win for customers, innovation and Dow Corning.