About 50% of CEOs in the chemicals industry claim that their firms are facing more hardship today than they were three years ago. This is according to a study done by PWC in 2016. While factors such as decreased natural gas prices and rapid technological advancements have been beneficial to some industries, the chemical industry has to contend with serious challenges at least for the next ten years.

Fortunately, if handled in the right manner, most of these challenges would present opportunities for the industry’s growth and realignment. Here are the major challenges that both small and large chemical companies have to deal with:

Volatility of Products Pricing

The instability of products pricing significantly affects the bottom line of many chemical businesses. Natural gas is especially an integral component in both the manufacturing and distribution of chemical products and hence lends so much uncertainty to the larger market. While the more affordable forms of energy are quite stimulating, manufacturers are still wondering how they can strategize for the future considering that their prices are bound to keep on changing.

Technological Advancements

The global chemical industry is generally resistant to changes. In fact, industry experts claim that a large number of chemical companies are yet to embrace technological developments on critical issues like cyber security. Any forward-looking chemical-related business should really emphasize on the ways high-tech solutions can streamline every aspect of business operations, including production, distribution, as well as customer service.

Rapid Regulatory Changes

The chemical industry is required to meet a complex web of overlapping requirements, which govern everything, including manufacturing, labelling, transportation, and storage of chemical products. In fact, every country, and even most local authorities, spells out their own regulations. Consequently, chemical companies spend billions of dollars every year on compliance alone. Unfortunately, these regulations keep on changing and chemical companies have to respond immediately to avoid being penalized.

It is also worth noting that some chemical companies have discovered that operating their business systems in the cloud is highly beneficial for managing the cost of compliance. While complex in-house systems are usually expensive and disruptive when it comes to upgrading, cloud systems are normally updated frequently. For instance, as a report format changes or new requirement is introduced, cloud-based reporting system means companies have quicker access to solutions that meet the new requirements.

Political Factors

The state of politics in the leading industrialized nations in the world affects the global chemical industry in numerous ways. In June, 2016, for instance, Brexit came close to killing the chemicals industry in Britain. Likewise, studies showed that both American presidential candidates were equally detested in the United States chemicals industry. As this industry becomes increasingly entangled in complex logistical requirements and interminable loops of legislations, politics is playing a critical role that industry leaders need to keep watch.


Dealing with challenges in the chemical industry can be quite challenging in itself. However, you don’t need to address every issue on your own. Besides having the right systems in place, you can also join organizations like CDMA, which advice their members on how to handle various challenges in the world of business. .