Over the past few decades, the chemical industry has undergone rapid changes. Its capital-market performance has grown over the long term and has outperformed the overall market. The motivation behind this strong exhibition has been the capacity of the chemical business to raise profit on a base of incomes and contributed capital that has expanded continuously, at a rate pursuing closer to GDP development.
Alongside this fundamental, there have been a few positive technological advancements that have profited this segment and aided their global capital-market performance. The most notable ones have been highlighted in this article, which is also proven to trend in the coming days.
Chemical firms must adapt quickly to these changes if they wish to embrace new market opportunities, gain a competitive edge, and overcome challenges.
1. IoT Solutions
The demand for the Internet of Things (IoT) in the chemical industry is witnessing a rapid growth because of the mounting need for efficient and augmented chemical production, and the need to address the risk associated with industrial activities. Moreover, swift industrialization in nations, for example, China and India is known to upgrade the interest for IoT arrangements further. APAC is the most noteworthy IoT in chemical industry and is anticipated to keep commanding this market comprehensively.
The IoT helps you build the framework for machine learning in this segment. It is capable of capturing real-time data on process parameters, an asset’s status and presentation, storage capacity, and inventory, product quality, inbound/outbound logistics, production costs, worker safety, etc. With this advanced capability, a massive amount of plant, operational, and asset data can be used along with sophisticated algorithms to simulate, predict, and recommend maintenance needs for the assets. This advantage optimizes uptime, improves operational performance, increases availability, and lengthens the asset’s lifespan.
According to a recent report by Global Forecast to 2024, the IoT in the chemical industry is estimated to cross USD 79.9 billion by 2024, at a CAGR of 9.7% from USD 48.9 billion in 2019.
Chemical industry and nanotechnology go hand in hand, as several areas of nanotechnology work because of the essential chemical that underlie its mechanisms and phenomena. Several polymers that are created within the chemical industry still fall under the dominion of this technology, especially when they are tweaked at the nanoscale, even if the material is not made out of it. Firms like DuPont have created many such polymers like Kevlar® and Teflon®, which are inspired from nanotechnology.
MIT is one of the leading organizations worldwide working on nanotechnology for the chemical industry. With more than 300 research papers on this subject since 2010, it has primarily focused on exploring carbon nanotube assets, and polymer films. Besides, the Georgia Institute of Technology has obtained around $14M in nine several grants since 2010 for innovation projects linked to the application and innovation of this technology for the chemical industry.
The US, Europe, and East Asia are the leading countries in nanotechnology for this segment.
3. Rapid Modeling and Prototyping
Rapid modeling in the chemical industry is one of the most excellent solutions for the problems in response to the escalating COVID-19 pandemic. In a world where the unprecedented has become ordinary, the global chemical industry has utilized the premium AI-driven predictive and machine learning tools to predict the performance and behavior of the formulations based on the consumer data and meet pandemic-generated demands quickly.
For instance, prototyping enables a chemical firm like Ineos to model various formulations of hand sanitizer and release the one that can effectively kill bacteria and viruses.
4. Zero Waste Factors
The raw materials and chemical energy supplies are getting tighter every day, primarily because of the pandemic outbreak. This ever-increasing demand and the impact of waste disposal on surrounding has encouraged experts to set stringent regulations. Going zero waste is one such environmental step, which is extremely economical and a realistic business idea for 2020. With the right utilization of tools, it can cut costs and speed up production efficiency.
Global chemical companies are now ensuring sustainability, with less energy and resource consumption. The critical nodes of the sustainable ecosystem include chemical production, applications, raw materials, and end-users, along with the increased focus on maximizing the use of renewables, recycling, energy recovery, and re-use by end-users to achieve the circular economy.
A few approaches of zero waste chemical industry include:
- Bio-based plastics: Bio-based (drop-in) plastics are fully recyclable and are formulated to drop-in to the recycling system without compromising its quality or increased cost.
- Wind turbines: PX35 carbon fiber increases the lifespan and blade efficiency, without additional weight, thus enhancing the power generated per wind turbine. Europe gets around 11% of its electricity demands from wind energy, which is expected to reach 25% by 2030.
- Battery materials: The recycling of battery materials is expected to see massive growth in the future because of the increased adoption of electric vehicles and strict regulations for recycling.
According to McKinsey’s research report, opportunities for the chemical firms functioning based on recycled plastics will experience a profit of €50 billion per year globally by 2030.
5. Connected Logistics
The COVID-19 crisis has realized the importance of digitally connected logistics to a chemical industry’s responsiveness and emergency planning. It helps you monitor and manage inventory levels and its location, and lets you perform connected transportation and distribution assets in real-time. The chemical firm manufacturers can thereby respond to supply chain and demand signals and act per the supply chain partners, government entities, and healthcare providers.
Some of the chemical companies are utilizing this approach to quicken the production, rally the supply chains and adjust the manufacturing operations in response to urgent calls for personal protective equipment, hand sanitizer, protective gear, and other safety products. Plastics manufacturers that are known for producing Mylar for hockey and lacrosse masks are now making medical shields.
Ineos, the largest European producer of IPA and ethanol, required to make hand sanitizer announced that they would build three new factories, each capable of producing one million bottles of hand sanitizer per month. Alongside, connected logistics can offer a timely response, so their products could reach the right destination quickly. Eastman was able to deliver the acetate sheet to Tennessee using the same approach.
The convergence of the trends mentioned above will help the chemical industry in challenging strategies that they have relied upon for a generation. In the present chemical business, the client feedstock proximity, or intellectual property, will not, at this point ensure an upper hand. What’s more, the difficult to-anticipate geopolitical dangers may affect facilitated commerce and the accessibility of crude materials, further clouding a serious standpoint.
However, you can still gain the edge by becoming an early adopter of innovative business models that acts as game-changers and digital disruptors, even amid uncertainty and pandemic disruption.