Last Update: April 2024
Strenghts
  • Very diversified end-markets even within each sub-segment, which reduces dependency on a particular sector
  • Companies in the ‘specialty chemicals’ and ‘food-chemicals’ subsectors enjoy a relatively higher pricing power thanks to the specificity of the products they offer and steady demand that has proven to be less affected by the current economic cycle
  • The increased production of electric vehicles represents an opportunity for lithium producers (essential for manufacturing electric batteries)
  • The ecological transition also represents an expansion opportunity for companies operating in the biofuels business, while chemicals used for the production of paper and cardboard will also continue to be highly demanded by the packaging industry

 

Weaknesses
  • Large investments needed for capital expenditures and research & development projects
  • As an energy-intensive sector, highly vulnerable to energy prices.
  • High reputational risk and many ESG-linked challenges to cope with, including  decarbonization, water and soil utilization, employee’s and customer’s healthcare, among others.
  • Future revenues for the petrochemical segment will be threatened by the lower use of plastics and derivatives in the face of new stricter environmental regulations