Value creation of chemical companies and its driving factors

If most of the performance of the chemical industry capital market is controlled by a few large companies, what does this mean for the CEO of chemical companies that can not change the performance of the chemical industry? The short answer is that they should focus on effective ways to create value for shareholders.

From a broader perspective, this is also consistent with our research: companies with more active capital allocation tend to perform better than companies with less active levels. Of course, it goes without saying that transactions must be carefully planned, and chemical companies must avoid paying excessive fees for acquisitions and ambitious mergers and acquisitions.

In this area, the chief executives of chemical companies hope to have a competitive advantage over ever before. We have observed that most of the leaders of chemical companies have made digitalization one of their top tasks.

A large part of TRS growth in the bulk chemical industry comes from companies active in high-growth markets in Asia. At the same time, in the field of specialty chemicals, companies active in the coating, paint, and agriculture industries are the main contributors to the growth of TRS.

We also found that there are fewer and fewer companies from the lowest quintile to the highest quintile, 9% more than 21%. On the other hand, compared to our final report, the number of visits between adjacent market areas increased immediately: 13% of the companies in the middle 60% had revenue growth fivefold. In the previous analysis, the ratio was 60% of 10% of intermediate companies and 48% of intermediate companies, while our previous analysis was 33%.

From a broader perspective, this is also consistent with our research: companies with more active capital allocation tend to perform better than companies with less active levels. A large part of TRS growth in the bulk chemical industry comes from companies active in high-growth markets in Asia. At the same time, in the field of specialty chemicals, companies active in the agriculture, coating, and paint industries are the main contributors to the growth of TRS. 

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