The Chemical Companies: An Internal Perspective

May 26, 2016 Simon Hardy

One Thing I Am Sure of, There Will Always Be Change in the Chemical Industry

This is the third in my triptych of blog’s looking back over my last ten years at Elemica. In my previous items I looked at some of the smaller changes that we helped to influence–driven from our knowledge of the Chemical Industry. In this one, I want to look at the big changes that have been going on actually within the Chemical companies themselves.
If we just look at the companies that originally invested in Elemica, the original 22 were: Air Products, Atofina, BASF, Bayer, BP, Brenntag, Celanese, Chemcentral, Ciba, Degussa, Dow, DSM, DuPont, Millennium Chemicals, Mitsubishi Chemical, Mitsui Chemicals, Rhoda, Rohm & Haas, Shell Chemicals, Solvay, Sumitomo Chemical, and Vopak. Apart from thanking these companies for their vision and rewarding that vision with a company that is now 16 years old and transacting over $400billion of their products, we should look at what has happened to them.
  • The mergers / purchasers – from this list, BASF and Ciba, Dow and Rohm & Haas, Solvay and Rhodia and of course the one we are seeing at the moment Dow and DuPont
  • The splits – Celanese and Degussa helped to create OXEA, Degussa turned into Evonik and Orion, DuPont created Axalta and Chemours, BASF begat Styrolution, Bayer not only gave us Lanxess but now Covestro
  • The re-naming – Millenium Chemicals is now Cristal, Atofina is now Arkema
Over the last ten years, I have seen project after project that combines systems, customers, data flows and company ethics.
Probably my favorite was a slightly different one. With typical DM&A work, Elemica has a reasonable amount of warning and we are ready with our DM&A experts and our project teams to help out the new companies. At the easiest end this is just renaming flows, ensuring partners know of changes etc. At the bigger end, we have taken over middleware systems and helped to completely re-engineer companies e-transactions strategy. My example had none of this luxury of time...
On occasion, particularly with chemical distribution, the parties do not merge with the companies, they just take over the customer list. When this happens, it is normally done in secret with lots of negotiations going on at high level in companies. People need to protect their brands and do not want to seem cavalier with their approach to customers. They do not want customers in one part of the world to worry about their product purchasing decision because of a bad taste from a different country. This secretive nature can sometimes mean that you do not hear about what is happening until a corporate announcement eight weeks before the hand-over.
In 2010, this is what my client had; my contacts heard about a change in mid-January for something that was going live on the 1st of April. They were also told, “By the way, part of the deal is to have an EDI link with the old supplier as we are buying their product to distribute to our new customers." This was a link to the supplier, the carrier and some customer invoicing. The Elemica client was concerned; he had eight weeks to create something that he had not prepared for, budgeted for or had any real understanding. He came to Elemica with a, "Can you help?"
At this point, our knowledge of how chemical companies act kicked in. We said, “Yes we can do this!” We quickly scoped the project and started working with our clients partner. Within the eight weeks we had left we got our top European Delivery teams and Project Managers working with all partners, we went live in the first week of April and allowed the business to pick up this new relationship. I am always pleased when a project goes to plan, but it is even better if you get feedback from the partner. This was the quote I got from one of the partners: “Working with Elemica felt good, too. It is good to be working with people that understand what they are doing. Since EDI isn’t core business for us and our customers teams doing it are often very small and not that capable.”   
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