Rationalization has become a top strategy for chemical companies to divest their commodity-based assets shifting toward higher-margin specialties. Many chemical companies responded by initiating job cuts, released warnings of reduced profits, and began the painful but necessary task of divesting assets to reduce costs and gain liquidity during those troubled times. For those companies that made the hard decisions, those actions enabled them to resist calls for price cuts, improve their competitive advantage, and even become key players in certain markets.
As the economy improves, rationalization has become a favorite strategy for many chemical companies to divest their commodity-based assets and shift toward higher-margin specialties. Companies considering a divestiture should proceed with prudent and careful analysis, recognizing the unique and sometimes unforeseen challenges involved in selling an asset.
In addition, active portfolio management, including divestitures, is a powerful tool for addressing economic crises, but it should also be a part of a company’s ongoing strategy. A portfolio rationalization should be done at least once, if not twice, a year, factoring in recent shifts in the business landscape, regulatory developments, actions by competitors and adjustments in company business goals and requirements. Combined with other strategies, rationalization will help chemical companies maintain a competitive advantage in today’s ever- changing markets.
In this webcast, we review portfolio rationalization in 2014, examining these strategies that many chemical companies are using to divest their commodity-based assets and shift toward higher-margin specialties.
Join Marc Summers, Director, Transaction Services and Barry Van Bergen, Director, Strategy Group who discuss these trends.