The chemical industry has seen many changes in recent years. Changes, ranging from speed to innovation to a focus on environmental, social and governance (ESG) practices, havenot only createdopportunities, but also challenges. To sustain long-term growth and maintain relevancy, companies must continuously evolve or risk being left behind. Industry leaders like PPG need to focus on advancing – not just maintaining – appropriate ESG principals, identify areas of improvement in the supply chain, and continue to explore new types of materials and technologies, taking into account their long-term impacts to directly address changing consumer preferences.
Advancements in innovation
The industry is advancingin many areas, with a specific focus on ESG.There has always been a drive for shifting cost and performance, which often improved the “E” and sometimes the “S”. However, the biggest advancement is that these levers have now become table stakes or the cost of doing business. No longer is ESG an afterthought, but something that’s built into the innovation process. I expect this to continue as more companies place greater emphasis on advancing their ESG principles.
There have also been many technical and scientific advancements in recent years that are influencingdecision making.Advancements in chemistry and materials science, as well as the development of new tools, have enabled us to create ground-breaking solutions for a variety of markets. The continuous introduction of highly functional materials and the precise control of chemistry allowsfor rapid progress.
Sailing into headwinds
While the industry continues to advance, there are several challenges helping to reshape the market. The biggest being disruptions around the world’s supply chain, something that was exposed over the past few years. What we’re seeing is a reversing of globalization that we haven’t seen in decades. As this happens this industry has almost reset a bit. Companies have begun to diversify not only the types and quantity of materials they use, but also the locations from which they source. This is a direct reaction to shortages faced throughout the pandemic when companies were challenged to find comparable substitutes amid global disruptions.Local sourcing is now a way to diversify our materials while simultaneously reducing our environmental impact, leveraging local materialsto decrease transportation costs.
Even with these clear benefits, moving to a localized supply chain does present challenges. The most glaring being economies of scale. Smaller raw material volumes often command higher prices, which increase production costs. Those higher production costs may then be passed on to the end consumer. Consistency can also be a challenge.Sourcing from multiple locations risksbatch-to-batch consistency. For global companies like PPG, it’s important to find a balance without negatively impacting price or quality.
Additionally, there has always been difficulty in understanding the long-term impacts of chemicals across society. A better understanding and renewed attention to the impact on personal health and the environment is challenging us to find inventivematerials that provide the market with what it needs without sacrificing the world around us.At PPG, our global team of dedicated experts work directly with scientists to develop solutions efficiently while prioritizing health and environmental impacts.
Charting a path forward
No matter how difficult, challenges always create opportunities. These opportunities, while difficult on the surface, are always best tackled together. Which is why it appears that the best path forward can be accomplished by working together. Whether that’s through partnerships between research and environmental groups, industry trade groups or through investments in the next generation of industry professionals, I’ve always been a firm believer that partnerships are key. Working together, we are poised tomove the industry forward and drive new innovations for the future.