Global chemicals market to grow to 5.1 trillion by 2020

14 October 2015 Consultancy.uk

The world’s chemical industry is expected to grow from $4.1 trillion in 2013 to $5.1 trillion by 2020 according to a report from Solidiance. The major driver for growth remains China, whose 25% chemical industry CAGR ended in 2013, but whose 8% annual growth rate to 2020 will continue to boost the industry. Particularly innovation in the automotive industry, energy transformation, construction and electronics will continue to increase chemical industry growth.

The Chinese economy has in recent years enjoyed stellar rates of growth. In demand sectors of the economy’s wider industry have, in line with the country’s growth, also enjoyed high rates of growth. In a recently released report from Solidiance, titled ‘New Chemical Era in China’, the consulting firm explores how the slowdown in the Chinese economy may come to affect the chemical market in the country and globally. The report provides some key insights into how the global market is faring, as well as a projection for the global market to 2020.

Global chemical sales 2003 to 2020.

Between 2003 and 2013, the Chinese market value has increased from $128 billion to $1,361 billion. Europe in that time grew from $505 billion to $819 billion, while the North American (NAFTA) market has grown from $370 billion to $686 billion. In total, the world market expanded from $1.46 trillion in 2003 to $4.1 trillion in 2013.

Global chemical CAGR
According to the report, the global economy’s continued weakness, as well as the slowdown in the Chinese economy, will see growth in the chemical industry slow between 2013 and 2020, increasing by only around a trillion dollars in the years to 2020. Although growth in the Chinese market enjoyed a CAGR of 25% between 2003 and 2013, growth to 2020 is expected to drop off by two thirds to 8%. As a result, the Chinese market is expected to be worth an estimated $2 trillion by 2020. The European market’s growth will fall slightly from the around 3% enjoyed between 2003 and 2013 to 2% to 2020, increasing only $13 billion in that time. The North American market sees its growth rate relatively unchanged at 4%, growing to around $800 billion by 2020.

Chemical industry CAGR growth 2003-2020

According to Solidiance a number of key drivers will continue to spur development in the Chinese chemicals industry, of which Consultancy.uk provides a summary:

Automotive: As China is set to become the world’s largest automotive market, innovation in products for the industry will continue apace. Chemical product developments will particularly revolve around advanced materials, with a focus on lightweight, safety, comfort, and environmental friendliness.

Energy: A global shift from carbon rich to sustainable energy sources – planned in the face of climate change – boosts the need for innovation in photo-electrics as well as other ways of producing sustainable energy. This will push for chemical processes and advanced material features to be used in solar panels, wind energy, water treatment, and gas purification.

Construction: The construction sector has enjoyed unprecedented growth in China over recent years, with continued demand from the residential and commercial sector, new materials and chemical products will continue to be in demand to provide safety and energy saving features to projects.

Electrical & Electronic: The continued demand of advanced electronics and ever more miniaturisation – coupled with environmental concerns about the dangerous chemicals used in the process – is pushing the chemical industry to come up with innovative solutions to producing electronics and improve performance.

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PwC advises UK's largest private firm on $1.1 billion US acquisition

03 December 2018 Consultancy.uk

The North West transactions services team of Big Four firm PwC has advised Ineos Enterprises on a billion dollar deal to purchase US-based Ashland Global Holdings. The acquisition will increase the company’s global headcount by 1,300 people, spread over manufacturing sites in Europe, the Americas, Asia and the Middle East.

Founded in 1998 by Sir Jim Ratcliffe, Britain’s richest man, Ineos is the largest private firm in the UK. The multinational chemicals giant is headquartered in London, UK, and has been leveraging merger and acquisition activity in the past two years in order to grow further. In April 2017, this saw Ineos reach an agreement to buy the Forties pipeline system in the North Sea from BP for $250 million. The sale included terminals at Dalmeny and Kinneil, a site in Aberdeen, and the Forties Unity Platform.

Now, the chemicals group has closed a further $1.1 billion deal to buy the composites business of US-based Ashland Global Holdings. The deal comprises of some 20 manufacturing sites in Europe, North and South America, Asia and Middle East employing 1,300 people. It is expected to generate sales of more than $1.1 billion, when the transaction completes in the first half of 2019, following regulatory approval.

PwC advises UK's largest private firm on $1.1 billion US acquisition

In order to facilitate the deal, professional services firm PwC provided Ineos Enterprises with financial, tax and pensions due diligence together with sale and purchase agreement advice. The North West based PwC financial team involved was led by Syedul Hussain, supported by Iain Kyle, Mark McCaw, David Tomlinson, Laura Woodward, James Whyman and Tendai Masanzu. Tax advice was led by Elisabeth Hunt with support from Brian O’Neill, while pension advice was provided Charles Ward and Paul Brunger. Sale and purchase agreement advice was provided by Trevor Milne, Kevin Clark, Jonny Rodwell and Declan O’Hara.

Commenting on PwC’s role in the purchasing process, Andrew Brown, CFO of Ineos Enterprises, said, “Ineos have been a longstanding client of PwC and they have supported us through a number of successful transactions. I’d like to thank PwC for their excellent support which has enabled us to complete another strategic acquisition.”

Syedul Hussain, PwC Transaction Services Partner, added, “This has been a substantial and complex transaction involving PwC teams both in the UK and the US and I’m delighted that through our longstanding relationship with Ineos we have been able to support them once again in order to complete another successful transaction”

Recently PwC worked alongside Clearwater International to help Pizza Hut UK successfully complete its management buyout (MBO). The consultancies ensured the reputed £100 million deal went smoothly as the top brass at Pizza Hut UK wrested control of the high street fast food business from private equity backer Rutland Partners.