Preface XVII
Acknowledgements XIX
List of Contributors XXI
1 Today’s Chemical Industry: Which Way Is Up? 1
Karsten Hofmann and Florian Budde
1.1 The Chemical Industry Today – A Snapshot 1
1.2 Eras of the Chemical Industry 7
1.3 Summary 10
2 Shareholder Value Orientation: Not a Question of Whether, but How 11
Bernd Heinemann and Thomas Augat
2.1 Capital Market Deviations as the Key Challenge for Shareholder Value Orientation 11
2.2 How Capital Markets Reflect Fundamental Value Creation 13
2.3 New Tools for an Advanced Shareholder Value Orientation 19
2.4 Summary 26
3 Structural Drivers of Value Creation in the Chemical Industry 27
Eric Bartels, Thomas Augat, and Florian Budde
3.1 Introduction to the Study 27
3.2 Mobility in a Mature Industry 28
3.3 What Drives Performance? 30
3.4 A Closer Look at Value Creation in the Segments 33
3.5 Summary 38
4 Chemicals – Driving Innovation in Other Industries 41
Thomas Schreckenbach and Werner Becker
4.1 Liquid Crystals: Superlative, Not Superfluous 42
4.2 Outlook 51
4.3 Summary 52
5 Today’s Challenges and Strategic Choices 53
Florian Budde, Utz-Hellmuth Felcht, and Heiner Frankemolle
5.1 Overall Outlook Stable 54
5.2 The Value Kaleidoscope 55
5.3 What Happens Next? 59
5.4 Summary 61
6 An Approach to Determining the Long-term Attractiveness of Commodity Chemical Businesses 63
Scott Andre, Sunil Sanghvi, and Thomas Rothel
6.1 Looking beyond Cyclicality 64
6.2 Putting the Model to Work 71
6.3 The Example of Ethylene 73
6.4 Tailoring the Model 75
6.5 Conclusion 76
6.6 Summary 76
7 Middle East: Opportunities and Challenges from the Rapid Emergence of a Global Petrochemical Hub 79
Christophe de Mahieu, Christian Gunther, and Jens Riese
7.1 Turning to the East 79
7.2 Pathways to Growth for the Middle East 85
7.3 Way Forward for the West 89
7.4 Capturing the Value 90
7.5 Conclusion 92
7.6 Summary 93
8 Survival when It’s Hard to be Special: A Perspective on Specialty Chemicals 95
Eric Bartels, Joël Claret, Sabine Deppe, and Ralph Marquardt
8.1 Performance Has Been Disappointing 95
8.2 The Market Is Not Getting Any Easier 99
8.3 Meeting the Challenge – Five Key Levers to Pull 102
8.4 Summary 108
9 Creating the World’s Leading Specialty Chemicals Company 109
Utz-Hellmuth Felcht
9.1 The Portfolio: “Creating the World’s Leading Specialty Chemicals Company” 109
9.2 Organization: “as Decentralized as Possible, as Centralized as Necessary” 113
9.3 A United Corporate Culture: “Blue Spirit” 117
9.4 New Challenges and the Next Transformation Goals 120
9.5 Conclusion 124
9.6 Summary 125
10 Prospects for Agribusiness: an Essential Contribution to Global Food Demand 127
Michael Pragnell and Robert Berendes
10.1 The Rationale of Agribusiness 128
10.2 Three Eras of Agribusiness 130
10.3 Driving Plant Yield 132
10.4 Opportunities beyond Yield 134
10.5 Summary 134
11 Industrial Gases – Growth by Continued Self-Renewal 137
Aldo Belloni and Lennart Selander
11.1 HThe Invisible Industry’: Stability and Profitability 137
11.2 One Hundred Years of Success: the Winning Ingredients 141
11.3 Fit for the Future: Ready to Meet the Challenges 143
11.4 Summary 148
12 Perspectives of Chemical Distributors as Partners of Industry 149
Klaus Engel and Gabriele Roolfs-Broihan
12.1 From Wholesaling to Supply Chain Management: the Evolution of Chemical Distribution 150
12.2 An Industry on the Move – the Major Trends 152
12.3 Perspectives Within Changing Environments 153
12.4 The Future Outlook 157
12.5 Summary 158
13 Systematically Revitalizing Innovation in the Chemical Industry 159
Birgit Konig, Gary Farha, and Thomas Weskamp
13.1 Drivers of Innovation 160
13.2 How to Organize for Innovation 170
13.3 Summary 172
14 Innovation for Growth 173
Thomas M. Connelly
14.1 The Ever-Present Challenges for the Innovation Process 173
14.2 Three Lessons Guide Us 177
14.3 What Will the Future Bring? 183
14.4 Summary 184
15 The Four Pillars of Sustainable Purchasing Transformations 185
Helge Jordan, Nicolas Reinecke, and Khosro Ezaz-Nikpay
15.1 Designing a Performance Transformation Program 186
15.2 Initiate and Anchor Behavioral Change in the Organization 188
15.3 Generate Impact through a Proven Value Creation Process 191
15.4 Create a Tailor-made Performance Measurement and Management System 196
15.5 Summary 199
16 Feedstock Price Volatility and How to Deal with It 201
Scott Andre and Sunil Sanghvi
16.1 What is Driving Feedstock Price Increases and Volatility? 201
16.2 A Brave New World of Feedstock 206
16.3 Meeting the Challenge of Feedstock Volatility 209
16.4 Conclusion 213
16.5 Summary 213
17 Taking a Leap in Purchasing 215
Gregory Nelson
17.1 Maximizing Value Creation 215
17.2 Creating Sustainable Value for the Business 219
17.3 The Next Horizon 224
17.4 Summary 225
18 Excellence in Operations – the Never-ending Journey Continues 227
Leonhard Birnbaum
18.1 Operational Improvement – the Bar Is Rising 227
18.2 Making Lean Operations Happen in Chemicals 230
18.3 Summary 239
19 State-of-the-art Production Concepts in the Chemical Industry 241
Uwe Nickel
19.1 Operating in a Transformed Environment 242
19.2 Challenges and Responses 246
19.3 Outlook 256
19.4 Summary 256
20 The Role of Site Services and Infrastructure for Productivity Management 257
Alejandro Alcalde Rasch
20.1 Site Services and Infrastructure: an Important Driver of Manufacturing Productivity 257
20.2 Transition: Site Services and Infrastructure’s Coming of Age 258
20.3 Going Forward: Increasing Site Services and Infrastructure’s Competitiveness 262
20.4 Summary 267
21 Creating a Revenue Advantage through Sales and Marketing Excellence 269
John Warner, Joël Claret, Ralph Marquardt, and Eric Roegner
21.1 Defining World Class 270
21.2 Building World Class Revenue Capability 275
21.3 Summary 279
22 Achieving Top Performance in Supply Chain Management 281
Andrea Cappello, Martin Losch, and Christoph Schmitz
22.1 Supply Chain Management as a Strategic Lever for the Chemical Industry 281
22.2 Key Supply Chain Management Elements and Opportunities for the Chemical Industry 283
22.3 Delivering on the Opportunities – the Key Success Factors for Achieving Top Performance 290
22.4 Conclusion 295
22.5 Summary 295
23 Right Second Time – Unlocking Value with IT 297
Peter Peters
23.1 Breaking the Barrier 297
23.2 World Class IT Infrastructure Management 299
23.3 ERP Harmonization as the Basis for Global Process Architectures 302
23.4 Making CRM Work to Create Profitable Growth 305
23.5 Key Success Factors for the Journey 308
23.6 Summary 309
24 Managing Organizational Performance 311
Karsten Hofmann and Heiner Frankemolle
24.1 Supporting Strategy by Structure 312
24.2 Understanding the Performance Challenge 315
24.3 Making Organizational Change Happen 318
24.4 Summary 325
25 Post-Merger Management: it’s All in the Design 327
Eric Bartels, Tomas Koch, and Philip Eykerman
25.1 Phases of an Integration 328
25.2 Defining and Communicating the Aspirations 330
25.3 Fully Identifying Value Creation Potential 330
25.4 Determining the Cornerstones of an Effective Organization 335
25.5 Tailoring the Integration Approach 338
25.6 Summary 341
26 M&A – the UCB Case 343
Georges Jacobs
26.1 A Brief History of UCB – Eight Decades of Mergers, Acquisitions, and Divestments 344
26.2 The Formation of Surface Specialties – A Three-way Integration 346
26.3 The Integration of UCB Pharma and Celltech 353
26.4 Key Learnings 356
26.5 Summary 357
27 The Chemical Industry and Public Perception 359
Wilfried Sahm
27.1 Public Perception of the Chemical Industry – its Structure and Significance 359
27.2 Image and Acceptance in Germany 362
27.3 Creating Awareness and Acceptance through Communication 369
27.4 Current Challenges 371
27.5 Summary 373
28 Industrial Biotech: From Promise to Profit 375
Rolf Bachmann and Jens Riese
28.1 Time to Exploit the Potential 375
28.2 Waste Biomass – a Feedstock with Mass Appeal 379
28.3 Turning the Promise into Profit 381
28.4 Capturing the Value – How it is Done in Practice 383
28.5 Finding the Right Answer 387
28.6 Summary 388
29 Industrial Biotech at DSM: From Concept to Customer 389
Colja Laane and Feike Sijbesma
29.1 From Petro to Bio 389
29.2 From Principle to Product 390
29.3 From Specialties to Commodities 398
29.4 From Innovation to Impact 399
29.5 Summary 401
30 Leveraged Buyout Transactions – Challenges and Learnings 403
Achim Berg, Florian Budde, and Bernd Heinemann
30.1 Chemical Sector LBOs Show No Sign of Abating 403
30.2 Understanding Value Generation in Chemical Buyouts 407
30.3 Learnings for the Chemical Industry 410
30.4 Learnings for Buyout Firms 411
30.5 Summary 415
31 What Attracts Private Equity Firms to the Chemical Industry? 417
Thomas Jetter
31.1 Chemical Industry Restructuring 418
31.2 Private Equity Transactions in Chemicals – Success Stories, Mostly 419
31.3 The Value Drivers of Private Equity Investments 420
31.4 Summary 425
32 Facing China 427
Sonke Bastlein, Ralf Dingeldein, Tomas Koch, and Karsten Neuffer
32.1 China Is No Longer HOptional’ 428
32.2 Most Chemical Companies Are Not up to Speed 430
32.3 The Lessons of Confucius 433
32.4 Summary 440
33 China – Key for Success in Asia 441
Jurgen Hambrecht
33.1 Why China? 441
33.2 BASF and its Long Relationship with China 442
33.3 Sustainable Development in China 447
33.4 Outlook 448
33.5 Summary 449
Index 451
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