{"id":249113,"date":"2026-10-07T10:52:08","date_gmt":"2026-10-07T08:52:08","guid":{"rendered":"https:\/\/blog.adesso-bc.com\/the-chemical-industry-in-2026-a-strategic-turning-point-for-c-level-executives\/"},"modified":"2026-10-07T11:33:05","modified_gmt":"2026-10-07T09:33:05","slug":"the-chemical-industry-in-2026-a-strategic-turning-point-for-c-level-executives","status":"publish","type":"post","link":"https:\/\/blog.adesso-bc.com\/en\/the-chemical-industry-in-2026-a-strategic-turning-point-for-c-level-executives\/","title":{"rendered":"The Chemical Industry in 2026+: A Strategic Turning Point for C-Level Executives"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">The Chemical Industry must reevaluate its Competitive Strategy<\/h2>\n\n<p class=\"wp-block-paragraph\">The European chemical industry is at a strategic turning point: wildly fluctuating energy prices, shifting global demand, changing regulations, and persistent geopolitical risks are permanently altering the operating environment. The current market situation can therefore no longer be explained solely by the traditional, cyclical chemical industry upswing.<\/p>\n\n<p class=\"wp-block-paragraph\">For board members and executive management, the question is therefore no longer simply when the next economic upturn will begin. Rather, the crucial issue is a fundamental assessment: <strong><em>Which business models, locations, and value chains will remain competitive in the long term under the new market conditions?<\/em><\/strong><\/p>\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.vci.de\/die-branche\/zahlen-berichte\/chemiemaerkte-weltweit-deutsche-chemie-weltweit-vci-analyse.jsp\">The data published by the VCI on global chemical markets in 2026<\/a>, as well as ongoing reports of a shortage of orders in the German chemical industry, vividly illustrate this persistent pressure on production and demand. Energy-intensive sectors and parts of the basic chemicals industry are particularly affected. However, the frequently cited claim of a \u201cpermanent loss zone\u201d should not be applied uncritically to the entire industry: it refers to specific segments of the European chemical industry whose existing cost structures are simply no longer sustainable under the new conditions.<\/p>\n\n<p class=\"wp-block-paragraph\">This does not mean the industry is fundamentally on the brink of collapse. However, its future viability will depend significantly more on which products, locations, and core competencies companies strategically prioritize.<\/p>\n\n<h2 class=\"wp-block-heading\">Four forces are changing the competitive landscape<\/h2>\n\n<h3 class=\"wp-block-heading\">1. Energy and raw materials are becoming strategic location factors<\/h3>\n\n<p class=\"wp-block-paragraph\">Chemical production is extremely energy- and raw material-intensive in many areas. As a result, energy is evolving from a mere cost factor into a competitive factor that determines purchasing decisions for entire locations. While traditional efficiency programs remain important, they can no longer compensate for the structural cost differences between European and non-European locations on their own. Management is therefore faced with fundamental questions about the future:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Which products can still be produced economically at which locations?<\/li>\n\n\n\n<li>Where are targeted investments in electrification, alternative energy sources, or efficiency improvements worthwhile?<\/li>\n\n\n\n<li>Which facilities require a fundamentally different production or operating model?<\/li>\n\n\n\n<li>Which products should be repositioned or consistently removed from the portfolio?<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/www.iea.org\/reports\/the-future-of-petrochemicals\" target=\"_blank\" rel=\"noreferrer noopener\">International Energy Agency (IEA)<\/a> also describes the chemical industry as a major industrial consumer of energy and raw materials. Energy and resource efficiency must therefore be directly linked to strategic portfolio and location decisions effective immediately.<\/p>\n\n<h3 class=\"wp-block-heading\">2. Geopolitics is changing Supply Chains<\/h3>\n\n<p class=\"wp-block-paragraph\">Chemical companies are highly dependent on international raw material, production, and sales structures. To date, many supply chains have concentrated on a few key suppliers, specific regions, or highly specialized production sites. Trade conflicts, export restrictions, sanctions, or disruptions to critical transportation routes thus have immediate, operational impacts on manufacturing.<\/p>\n\n<p class=\"wp-block-paragraph\">Complete regionalization is not realistic for every product. A targeted differentiation is much more likely and pragmatic:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Where are alternative suppliers absolutely necessary?<\/li>\n\n\n\n<li>Which materials require regional or redundant procurement channels?<\/li>\n\n\n\n<li>For which products must capacity be flexibly available across multiple regions?<\/li>\n\n\n\n<li>Which risks are economically acceptable \u2013 and which are not?<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">disruption. Rather, it means making critical dependencies transparent, preparing for scenarios, and remaining capable of acting quickly in an emergency. For the chemical supply chain, SAP cites integrated planning, segmentation, and scenario analysis, among other things, as key digital enablers.<\/p>\n\n<h3 class=\"wp-block-heading\">3. Regulation becomes part of Business Logic<\/h3>\n\n<p class=\"wp-block-paragraph\">In many organizations, regulatory requirements are still mistakenly dismissed as the sole responsibility of compliance or legal departments. In the chemical industry, however, they have long had a direct impact on products, materials, suppliers, processes, and investment decisions.<\/p>\n\n<p class=\"wp-block-paragraph\">These include, among others:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>REACH and other chemical regulations,<\/li>\n\n\n\n<li>hazardous substances and product safety,<\/li>\n\n\n\n<li>CO\u2082 and sustainability reporting,<\/li>\n\n\n\n<li>supply chain and product data,<\/li>\n\n\n\n<li>EExport and import controls,<\/li>\n\n\n\n<li>Quality and traceability requirements.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/echa.europa.eu\/regulations\/reach\/understanding-reach\" target=\"_blank\" rel=\"noreferrer noopener\">European Chemicals Agency (ECHA)<\/a> describes REACH as the central regulatory framework for the registration, evaluation, and authorization of chemical substances. At the same time, the <a href=\"https:\/\/climate.ec.europa.eu\/eu-action\/eu-emissions-trading-system-eu-ets_en\" target=\"_blank\" rel=\"noreferrer noopener\">EU Emissions Trading System<\/a> and the <a href=\"https:\/\/taxation-customs.ec.europa.eu\/carbon-border-adjustment-mechanism_en\" target=\"_blank\" rel=\"noreferrer noopener\">Carbon Border Adjustment Mechanism (CBAM)<\/a> are having a noticeable impact on the economic assessment of emission-intensive stages of the value chain. Sustainability therefore by no means begins with downstream reporting \u2013 it must be directly integrated into portfolio, site, and investment strategies.<\/p>\n\n<h3 class=\"wp-block-heading\">4. Demand is shifting<\/h3>\n\n<p class=\"wp-block-paragraph\">Demand for chemical products is not disappearing; rather, it is undergoing a fundamental restructuring. While standardized and energy-intensive products face strong cost and price pressures, specialty chemicals, application-specific system solutions, and integrated services are becoming increasingly important.<\/p>\n\n<p class=\"wp-block-paragraph\">McKinsey therefore calls for a strategic restructuring of the industry rather than purely incremental improvements. The focus here is on decarbonization, innovation, portfolio adjustments, and digitalization. <a href=\"https:\/\/report.basf.com\/2024\/en\/combined-managements-report\/fundamentals-of-the-group\/forecast\/economic-environment\/chemical-industry.html\" target=\"_blank\" rel=\"noreferrer noopener\">BASF\u2019s assessment of the economic environment in the chemical industry<\/a> also underscores, from the perspective of a global supplier, the shifting regional demand and varying dynamics of individual submarkets.<\/p>\n\n<p class=\"wp-block-paragraph\">For companies, this opens up concrete growth opportunities in specialization, customized solutions, circular products, and data-driven services. The key question for management is thus shifting from a purely volume-based mindset (How much can we produce?) to a value-oriented approach: <strong><em>For which customer challenges and value chains will our offerings be particularly relevant in the future?<\/em><\/strong><\/p>\n\n<h2 class=\"wp-block-heading\">From Efficiency to Resilience<\/h2>\n\n<p class=\"wp-block-paragraph\">During stable market phases, the supply chain could be optimized primarily for minimal costs and maximum capacity utilization. In a highly volatile environment, this purely efficiency-based perspective falls short. Today, companies must also actively factor in supplier dependencies, lead times, global transport routes, substitution options, and regulatory risks into their assessments.<\/p>\n\n<p class=\"wp-block-paragraph\">This may result in higher costs in the short term, as redundant suppliers or safety stock are not free. However, it provides effective protection against drastic production outages. Management\u2019s task, therefore, is by no means to pit efficiency against resilience. Rather, it is a matter of deciding where resilience is economically necessary and what price it justifies.<\/p>\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/www.pwc.de\/de\/branchen-und-markte\/chemie-industrie\/pwc-chemical-distributors-transformation-trends-april-2025.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">PwC study \u201cChemical Distributors Transformation Trends 2025\u201d<\/a> highlights this growing complexity stemming from diversified supply chains, digitalization, and regulatory obligations in the distribution sector. Although the findings are not one-to- ly applicable to chemical producers, they underscore the urgency of integrated data and management models for the entire industry.<\/p>\n\n<h2 class=\"wp-block-heading\">Transparency is becoming a Strategic Capability<\/h2>\n\n<p class=\"wp-block-paragraph\">Data architecture remains a key obstacle: In many companies, cost, energy, and emissions data are still siloed across different systems and reporting frameworks. As a result, material costs, production data, energy consumption, supplier risks, and regulatory information can only be consolidated with a time lag.<\/p>\n\n<p class=\"wp-block-paragraph\">However, CFOs and COOs need a consolidated, real-time view of costs, capacities, energy, emissions, risks, and margins. The digital core provides the technical foundation for this. <em>SAP S\/4HANA, industry-specific SAP processes, and the SAP Business Technology Platform (BTP)<\/em> are the key building blocks \u2013 though they do not replace a clear business strategy or operational data accountability.<\/p>\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/klardenker.kpmg.de\/kostenoptimierung-in-der-chemieindustrie-strategien-fuer-die-zukunft\/\" target=\"_blank\" rel=\"noreferrer noopener\">KPMG\u2019s perspective on cost optimization in the chemical industry <\/a>provides the appropriate bridge from crisis diagnosis to concrete management: Sustainable cost optimization must be linked to process improvement, digitalization, energy efficiency, and strategic prioritization.<\/p>\n\n<h2 class=\"wp-block-heading\">What role does AI play?<\/h2>\n\n<p class=\"wp-block-paragraph\">Artificial intelligence also offers significant potential in the chemical industry \u2013 whether in demand forecasting, supply chain analysis, quality management, predictive maintenance, or energy optimization. However, its actual value stands or falls with the quality of the digital foundation. Inconsistent master data, fragmented processes, and unclear data ownership drastically limit the scalability of AI applications.<\/p>\n\n<p class=\"wp-block-paragraph\">The central premise is therefore this: <em><strong>AI readiness does not begin with the AI model, but with consistent data and standardized processes.<\/strong><\/em> AI should not be viewed as an isolated silver bullet for structural change, but rather as an accelerator that enables companies to make better use of existing data and prepare complex decisions more quickly.<\/p>\n\n<h2 class=\"wp-block-heading\">The C-Level Agenda for 2026+<\/h2>\n\n<p class=\"wp-block-paragraph\">Five key management tasks for senior leadership emerge from these structural changes:<\/p>\n\n<ol class=\"wp-block-list\">\n<li><strong>Reassess the portfolio and locations:<\/strong> Which products and facilities will remain competitive in the long term under the changed conditions?<\/li>\n\n\n\n<li><strong>Targeted funding for resilience: <\/strong>In which areas are alternative suppliers, regional capacities, or safety stocks economically justified?<\/li>\n\n\n\n<li><strong>Integrate sustainability into business operations:<\/strong> How do CO\u2082 emissions, energy consumption, and material efficiency directly influence investment and product decisions?<\/li>\n\n\n\n<li><strong>Strengthen the digital core:<\/strong> Which core processes must be consistently standardized, and which data landscapes need to be harmonized?<\/li>\n\n\n\n<li><strong>Prioritizing AI by value contribution<\/strong>: Which use cases deliver measurable progress in terms of margins, supply security, quality, energy efficiency, or compliance?<\/li>\n<\/ol>\n\n<h2 class=\"wp-block-heading\">Conclusion and Outlook<\/h2>\n\n<p class=\"wp-block-paragraph\">The chemical industry is not facing a single crisis, but rather a novel combination of cost, energy, demand, regulatory, and geopolitical risks. Short-term cost-cutting programs fall short here. Companies need a clear portfolio and site strategy, more resilient supply chains, integrated management data, and a future-proof digital core on which automation and AI can be effectively built.<\/p>\n\n<p class=\"wp-block-paragraph\">The following articles in this series demonstrate specifically how this transformation agenda can be implemented step by step: from the digital core through supply chain resilience and sustainability management to future scenarios and an integrated transformation architecture.<\/p>\n\n<p class=\"wp-block-paragraph\"><em>adesso business consulting<\/em> supports companies in aligning these strategic objectives with operational implementation \u2013 from analyzing existing SAP and process landscapes to designing a digital core based on industry standards, and finally to implementing concrete transformation and automation projects. Contact us \u2013 we look forward to discussing this with you!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The European chemical industry is at a strategic turning point: wildly fluctuating energy prices, shifting global demand, changing regulations, and persistent geopolitical risks are permanently altering the operating environment. The current market situation can therefore no longer be explained solely by the traditional, cyclical chemical industry upswing.<\/p>\n","protected":false},"author":9,"featured_media":249114,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[918],"tags":[911,920,919,675],"class_list":["post-249113","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chemicals","tag-ai-2","tag-chemical-industry","tag-competition","tag-supply-chain","blogauthor-jan-ammann"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Chemical Industry in 2026+: A Strategic Turning Point for C-Level Executives - adesso business consulting Blog<\/title>\n<meta name=\"description\" content=\"The European chemical industry is at a strategic turning point and must reevaluate its competitive strategy.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blog.adesso-bc.com\/en\/the-chemical-industry-in-2026-a-strategic-turning-point-for-c-level-executives\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Chemical Industry in 2026+: A Strategic Turning Point for C-Level Executives - 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