Chemical Market Busy with Mergers and Acquisitions

by Greg Wimble, on August 24, 2017

THe chemical sector has seen merger and acquisition activity of late.
The chemical sector has seen merger and acquisition activity of late.

Chemical producers need to keep up with their market, responding to changing forces and demand shaped by high-level interactions. Companies are engaged in a brisk period of mergers and acquisitions, which is altering the dynamics of which products are available in certain regions, and at what prices.

The fact that the chemical sector is always changing is one of the most compelling reasons for producers to keep their supply chains flexible over time. When conditions change, perhaps requiring the addition of a new materials supplier or signaling the opening of a new market opportunity, organizations should be ready to evolve.

Mergers in Agriculture
Some of the biggest chemical producers affecting the agricultural sector are in the midst of complex mergers and acquisitions, according to Farm Journal. At the end of the process, the new entities - and the businesses they spin off - may be quite different than they are at present.

For example, DuPont currently offers crop protection products, but plans top divest those elements to FMC, including its research and development operations. As giants of the industry make these concessions to comply with anti-trust laws, the landscape of chemical production and use in agriculture will also change.

Chemical producers are engaged in mergers and acquisitions.Chemical producers are engaged in mergers and acquisitions.

Chemical Frenzy
According to The Middle Market, there has been plenty of activity among chemical producers in general recently. This has taken the form of investment firms making investments that will change businesses' directions, as well as more direct acquisitions. The source described the recent market for mergers and acquisitions as "robust." Along with these acquisitions is the question of how do we handle the expensive and time consuming integration process of these acquisitions.

Being Ready
When it's unclear from one month to the next which organizations will be changing their operations or structures, there is a need to be ready for change. Chemical supply chain members that can quickly make alterations to their own supplier relationships and production processes are well-equipped to handle an uncertain market. Standardized labeling that is GHS compliant and up to the stringent standards affecting the chemical sector is a must.

For more on chemical labeling check out our Q&A report on that "6 Burning Questions on Chemical Labeling."

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