The competition for leadership in the global chemical industry has shifted

Studying the history of overseas chemical industry, we can see that the evolution of the industry has undergone major changes since the 1960s. At present, the basic theory widely applied in chemical and chemical textbooks still stays at the level of 40 or 50 years ago. The barriers established by synthetic technology and engineering technology can no longer be further thickened. The polymer revolutionary dividend driven by research and development after World War II is unsustainable. But multinational companies continue to reinforce learning and self-evolution in their ongoing competition and reshape their strategic boundaries: some companies such as DuPont and Dow Chemical replaced research with development in the 1970s, and new products continue to emerge, but These new products are still based on the basic technologies they have developed since the 1920s and 1960s, turning them into suppliers of solutions and specialty chemicals that they started in the 1920s. While other surviving companies are realizing that their R&D innovations in the chemical field are no longer able to provide more competitiveness, they have chosen to explore more in the emerging life sciences, Monsanto and Ciba-Geigy Limited, which was spun off from Basel, has succeeded in this path, especially the latter, which has made Novartis, the global leader in the pharmaceutical industry.

On the other hand, like the automotive and machinery industries, the global demand for chemicals is shifting to emerging markets. From the perspective of income scale, emerging market chemical companies closely related to national oil companies have become among the top ranks. In 2018, Sinopec Sales are close to BASF, and SABIC and other chemical companies from emerging markets such as Saudi Arabia, India and Brazil are close to or even surpassing the top multinational chemical companies such as INEOS, LG Chem, Mitsubishi Chemical and Covestro. The chemical industry has entered an advanced stage of global competition, and emerging market companies are more likely to challenge the global leadership of multinationals in the chemical industry than in automobiles and machinery.

Although the chemical companies in emerging market countries are already close to the top multinational companies in terms of scale, and from the perspective of product structure, the contribution of innovation capabilities to chemical disciplines, and production efficiency, participants from emerging markets will be in the future for a long time. It will still be a follower of overseas giants. But pure numbers mask the differences between market segments. Currently, participants in emerging markets are mainly engaged in the production of basic chemicals and resins, while multinational companies are basically in control of the markets for specialty chemicals, industrial gases, and agrochemicals. We have observed the development of the global chemical industry for hundreds of years and found that great multinational companies such as BASF, DuPont, Dow and Monsanto survived fierce competition and have strong self-learning and evolution capabilities. Growth, development, mergers and acquisitions and spin-offs basically follow the following themes: the construction of barriers to entry, the establishment of strategic boundaries, the encounter of growth limits, and the search for new strategic boundaries. Then, in the face of the current environment, multinational giants and emerging market chemical companies are constantly reshaping the strategic boundaries of competition. Which companies in China will break through in the future, and can gradually get closer to those chemical giants?