Indian chemical companies are advised to shift their focus from quantity-based metrics to solving chemistry problems for customers, as per a report by Boston Consulting Group (BCG). The report suggests that these companies should aim to become global-scale institutions and integrate into capex super cycles early to reap benefits in the 2030s. With the Indian chemical market expected to surpass USD 300 billion by 2030, the report emphasizes the need for substantial growth beyond incremental levels.
The report highlights that India’s chemical sector has shown significant growth over the past two decades, delivering leading shareholder returns globally. Amit Gandhi, Managing Director and Senior Partner at BCG India, emphasized the importance of bold ambition and strategic choices for Indian chemical companies to emerge as global giants. He stressed the need to scale cash from less lucrative parts of the value chain and make strategic investments in core value pools.
BCG’s recommendations include scouting value in mid-sized European and Japanese firms, acquiring select companies for intellectual property, brand, and market access, and enhancing digital presence for global markets. The firm also suggests leveraging digital technologies and artificial intelligence to enhance margins by 200-300 basis points and revamping the entire operating model from production to sales.
Amita Parekh, Managing Director and Partner at BCG India, underlined the necessity for Indian chemical companies to enhance margins through digital and AI technologies, consistently invest in research and development, and forge strong global partnerships to ensure long-term competitiveness. She emphasized that India’s chemical industry has the potential to compete globally, but success will hinge on how companies revamp their operating models.
