The commodity chemicals industry has traditionally been under a lot of pressure. The industry is mature with low profit margins. The large volume of production and market size entice competition. Product differentiation is limited and individual company profitability is increased by lower costs and higher efficiency of operations. The industry has also faced increased pressures to operate to higher safety standards and environmental compliance.
Competition and low profit margins drive the need for cost-effective capital investment solutions. This is true for both market peaks and troughs. The commodity market is cyclical and companies cannot reliably time the cycle. After several years of unprecedented growth, commodity companies are currently faced with a shrinking economy and lower demand for their products and services. In response to the current economic downturn, commodity companies shifted focus from growth opportunities to compliance and stay-in-business projects. These low to no return on investment projects require an even higher than typical focus on cost effectiveness of the investments.
With more than 20 years experience in the processing industries, IPA has evaluated over 3,000 commodity chemicals projects from small process units to large integrated complexes executed by more than 70 major commodity chemicals companies. The database includes polymers, bulk petrochemicals and intermediates, and basic industrial and organic chemicals. The database is global and includes projects from the Americas, Europe, and the Asia Pacific regions.
IPA’s unique database of these projects and the extensive data collected on each project allows us, through quantitative measurements and analysis of our database, to understand the project practices that can help your specific project succeed with cost-competitive results.
Our benchmarking capabilities are unique. We can evaluate-and help improve-the capital cost effectiveness of any chemical project worldwide, from a grassroots facility to an expansion to a major modification of an existing facility. IPA’s evaluations are done during different stages of the project development process.
The key to effective capital stewardship is selecting the right project and then executing it well. IPA is able to offer our chemical customers specific services to help with project selection, development, and execution. IPA assessments are able to identify project risk and provide each project with guidance on lowering the cost of investment. IPA assessments provide you with data-driven Best Practices aimed at minimizing the risk and improving chances of success.