At the 2022 FlexPO+ (now incorporated into the ADI Forum), Uday Turaga, CEO, ADI Analytics, discussed how the specialty chemical sector generally yielded higher returns than commodity chemicals. This trend is evident in historical shareholder performance. He spoke of the performance of specialty chemical segments, noting that while the first half of 2022 was challenging for most, the long-term trend over the past decade showed significant growth in returns for specialty chemicals, driving increased emphasis on these materials across companies. He spoke of how specialty chemicals offer higher returns and how product differentiation yields significant price premiums in commoditized markets.
Despite widespread commoditization in the broader industry, there was a strong trend towards product differentiation and solution development even within mature, commoditized segments like PVC and polyethylene. By tailoring specific grades and coupling them with other material offerings for niche applications, companies could achieve significant price premiums, ranging from 9 to 20 cents per pound. This highlighted an opportunity to extract higher value even in highly competitive markets.
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ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy transition, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
We also host the ADI Forum that brings c-suite executives together for meaningful dialogue and strategic insights across the oil & gas, energy transition, and chemicals value chains. Learn more about the ADI Forum.
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