Europe’s Chemical Firms Seek Catalyst for Competitiveness

Rhea-AI Summary

The European chemical industry, struggling with environmental challenges, reduced demand, and rising costs, is looking to digital technology for revitalization, as per a 2024 report by Information Services Group (ISG). The sector faces pressure from cheap Chinese imports and fluctuating energy prices, necessitating resilient and efficient manufacturing processes.

Digital tools enhance supply chain transparency, demand estimation, and real-time tracking, despite layoffs and plant closures. Innovation is expected to drive progress, especially in recycling, renewables, and high-tech plastics. GenAI is being explored for creating new products, optimizing processes, and improving safety.

European chemical firms must also navigate strict EU regulations. The report evaluates 26 providers, highlighting Accenture, Capgemini, Deloitte, and IBM as leaders in digital IT/OT services, supply chain logistics, and sustainability innovation. Genpact and Tech Mahindra are noted as rising stars. The full report is available for purchase.

Positive

• Digital tools enhance supply chain transparency, traceability, and security.
• GenAI supports new product creation, process optimization, and safety improvements.
• Innovation in recycling, renewables, and high-tech plastics expected to drive progress.
• Accenture, Capgemini, Deloitte, and IBM identified as leaders in multiple quadrants.
• Genpact and Tech Mahindra recognized as rising stars with high future potential.

Negative

• Industry facing diminished demand and escalating costs.
• Pressure from inexpensive chemical imports from China.
• Layoffs and plant closings due to tough market conditions.
• Struggles with stringent regulatory compliance set by the EU.
• Impact of recent geopolitical disruptions and fluctuating energy prices on supply chain.

Digital tools may help the struggling industry streamline its processes and enhance its record of innovation, ISG Provider Lens™ report says

LONDON--(BUSINESS WIRE)-- A somewhat diluted European chemical industry is hoping that digital technology will provide the formula it needs to regain some of its strength in the global market, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Chemical Industry Services and Solutions report for Europe finds that for a chemical industry plagued by a potent mix of environmental concerns, diminished demand and escalating costs, technology-driven innovation and digital transformation may prove to be the best solutions. In addition to impediments on the home front, the market is under pressure from the influx of inexpensive chemical imports from China, the ISG report says.

“Europe’s chemical companies are looking to build more resilient and efficient manufacturing processes,” said Julien Escribe, partner, ISG SEMEA. “Technology and service providers in the region are responding with solutions that enhance supply chain transparency, traceability and security.”

For major players in the European chemical industry, digitalization is considered a crucial element for improving supply chain planning in response to the volatility caused by recent geopolitical disruptions and fluctuating energy prices, the ISG report says. According to the report, digital tools have also proved beneficial for tasks such as demand estimation, tracking raw materials to their sources, real-time order tracking, warehouse and port automation for sorting and safety and optimizing supply networks.

Despite facing tough market conditions that have led to layoffs and plant closings, Europe’s chemical industry maintains its strength in innovation, the ISG report says. In the coming years, that innovation will play a pivotal and potentially advantageous role, particularly with the development of new technologies in recycling, renewables, electrification and high-tech plastics, ISG says.

One of the factors that could aid in both innovation and planning is GenAI. According to the ISG report, GenAI holds the potential to support various applications in the industry, including creating new products, designing processes, optimizing current processes, improving safety measures and reducing environmental impact.

“Major players in the European chemical industry are actively exploring and implementing GenAI solutions,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Their principal goal is to enhance their operational efficiency.”

The report also examines how the chemical industry is contending with stringent regulatory compliance set by the European Union.

For more insights into some of the challenges facing Europe’s chemical industry, including an aging infrastructure and more stringent regulations, along with ISG’s advice for addressing them, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Chemical Industry Services and Solutions report for Europe evaluates the capabilities of 26 providers across three quadrants: Digital IT/OT Services, Supply Chain and Logistics and Sustainability and Innovation.

The report names Accenture, Capgemini, Deloitte, HCLTech, IBM, Infosys, TCS and Wipro as Leaders in all three quadrants, while Genpact and Tech Mahindra are named as Leaders in one quadrant each.

In addition, EY, Genpact and Tech Mahindra are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

The 2024 ISG Provider Lens™ Chemical Industry Services and Solutions report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516854285/en/

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com



Philipp Jaensch, ISG

+49 151 730 365 76

philipp.jaensch@isg-one.com

Source: Information Services Group, Inc.

FAQ

What challenges is the European chemical industry currently facing?

The industry is dealing with environmental concerns, reduced demand, rising costs, and competition from cheap Chinese imports.

How can digital tools benefit the European chemical industry?

Digital tools can enhance supply chain transparency, traceability, demand estimation, real-time tracking, and optimize supply networks.

What role does GenAI play in the European chemical industry?

GenAI helps in creating new products, designing and optimizing processes, improving safety measures, and reducing environmental impact.

Which companies are named as leaders in the ISG report for the European chemical industry?

Accenture, Capgemini, Deloitte, and IBM are named as leaders in digital IT/OT services, supply chain logistics, and sustainability innovation.

What are some future innovation areas for the European chemical industry?

Future innovation areas include recycling, renewables, electrification, and high-tech plastics.