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ICIS research on the chemical industry's response to the current demand downturn, in conjunction with J&M Management Consulting

ICIS research on the chemical industry's response to the current demand downturn, in conjunction with J&M Management Consulting

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J&M Presentation.Ppt Presentation Transcript

  • 1. ICIS / J&M – Chemicals Market Survey ‘09 Prepared by: Kevin Puttock, Reed Business Insight On behalf of: April 2009 Reference Number: 4983
  • 2. ICIS / J&M chemical market survey ‘09 Contents • Background & Objectives Slide 3 • Methodology Slide 4 • Respondent Profile Slides 5 - 12 • Main findings Slides 13 - 34 • Key findings Slides 35 - 36 • Appendix Slides 37 - 49 2
  • 3. ICIS / J&M chemical market survey ‘09 Background & Objectives • Global financial traumas, lack of business confidence and a sharp fall-off in chemical demand are forcing companies to take critical short-term actions as they focus on surviving the crunch. • Research was required by ICIS and J&M Management Consulting to measure the current pulse of the industry and find out how chemical industry executives are reacting in these unprecedented times. • Research will be used by ICIS primarily for editorial purposes 3
  • 4. ICIS / J&M chemical market survey ‘09 Methodology • The survey was conducted as an online self completion quantitative survey sent by email to registered readers of ICIS Chemical Business. • The survey was incentivised with a prize draw to win an iPod Touch. • Fieldwork was conducted over a 3 week period from 2nd – 22nd April, 2009. • In total 275* respondents completed the survey. * Although this is a typical response for a survey of this kind, it is still low overall and it should be remembered that the majority of prospective respondents did not reply. Therefore care must be exercised when interpreting the results as those non-respondents may differ in their profile and views. In addition, a self completion survey tends to be biased towards the more loyal readers of a publication. 4
  • 5. ICIS / J&M chemical market survey ‘09 • Respondent Profile • Job position • Length of time spent working in the chemicals industry • Geographic location • Segments operating within • Global revenue • Number of employees • Organisation ownership status 5
  • 6. ICIS / J&M chemical market survey ‘09 Around a quarter of respondents are CEO‟s, Chairmen or Presidents of their organisations Q. Which of the following job titles best reflects your position? Base: all respondents (269) 6
  • 7. ICIS / J&M chemical market survey ‘09 Around three quarters of respondents have been working in the industry for more than 10 years Q. How many years have you been working in the chemicals industry? Base: all respondents (272) 7
  • 8. ICIS / J&M chemical market survey ‘09 39% of respondents work for organisations based in North America, followed by 20% in Europe and 17% in India Q. Where is your company based? Base: all respondents (274) 8
  • 9. ICIS / J&M chemical market survey ‘09 Respondents most commonly work for orgabnisations that operate within the specialty chemicals segment Q. In which of the following segments does your company operate? Base: all respondents (273) 9
  • 10. ICIS / J&M chemical market survey ‘09 Just under half of respondents work for organisations with a global revenue of up to $500m Q. What is the total global revenue of your company? Base: all respondents (271) 10
  • 11. ICIS / J&M chemical market survey ‘09 Just over half work for organisations that employ 500 people or less in total Q. How many people does your organisation employ in total? Base: all respondents (275) 11
  • 12. ICIS / J&M chemical market survey ‘09 Around a third of respondents each work for organisations that are publicly listed, privately owned or family owned Q. How would you describe the ownership status of your company? Base: all respondents (274) 12
  • 13. ICIS / J&M chemical market survey ‘09 • Main findings • Expectation of whether the downturn will continue • Change in demand over the next 12 months • Change in employment levels over the next 12 months • Expectation of whether respondent will still be employed in 12 months time • Expectation of debt defaults over the next 12 months • Expectations of changes in mergers and acquisitions activity • Importance of performance metrics • Change in working capital • Change in demand over last 6 months • Excess capacity • At risk suppliers • Renegotiating terms with suppliers • Importance of customer-focussed activities • Customer-focussed activities currently being used • Investment in R&D • Plans to bring new products to market • Employment actions taken • Agreement with opinion statements • Expectation of duration of downturn • Expectations of whether company will survive the downturn 13
  • 14. ICIS / J&M chemical market survey ‘09 Around two thirds of respondents believe the current downturn in demand will continue into Q2 of 2009 Q. Do you expect the sharp downturn in demand in Q4 2008 / Q1 2009 to continue in Q2? Base: all respondents (275) 14
  • 15. ICIS / J&M chemical market survey ‘09 Over a quarter of respondents expect demand in the chemical sector to decrease by more than 11% in the next 12 months. The majority of those that think demand will increase, believe it will be by 1-5% Total decreased = 64% Total increased = 28% Q. How do you expect demand in the chemical sector to change over the next 12 months? Base: all respondents (275) 15
  • 16. ICIS / J&M chemical market survey ‘09 Over a third of respondents believe that the level of full time employment in the chemical sector will decrease by 6–15% in the next 12 months. Only 8% expect the level to increase Total decreased = 78% Total increased = 8% Q. How do you expect the levels of full-time employment in the sector to change over the next 12 months? Base: all respondents (275) 16
  • 17. ICIS / J&M chemical market survey ‘09 In terms of still being employed within the chemical sector in 12 months time confidence is relatively high, with 89% believing they definitely or probably will be Total „yes‟ = 89% Q. Do you expect to still be employed within the chemical sector in 12 months time? Base: all respondents (273) 17
  • 18. ICIS / J&M chemical market survey ‘09 21% do not expect debt defaults from any of the company types listed. Those that expect some debt defaults most commonly expect them from major customers Q. Do you expect any debt defaults / Chapter 11 / bankruptcy filings over the next 12 months from the following types of organisations? Base: all respondents (274) 18
  • 19. ICIS / J&M chemical market survey ‘09 Around half of the respondents believe that M&A / divestment activity will slightly increase in the chemical sector over the next 12 months Total increased = 64% Total decreased = 18% Q. How do you expect mergers and acquisitions / divestment activity in the chemical sector to change over the next 12 months? Base: all respondents (275) 19
  • 20. ICIS / J&M chemical market survey ‘09 Cash flow is rated as the most important performance metric at the moment. 44% feel that people turnover is a low level performance metric for their organisation Q. Please rate the level of importance of each of the following performance metrics for your company at the moment? Base: all respondents (various) 20
  • 21. ICIS / J&M chemical market survey ‘09 In total, 59% of respondents identified that their company‟s working capital has decreased since this time last year Total decreased = 59% Total increased = 16% Q. How has the level of your company's working capital changed since this time last year? Base: all respondents (275) 21
  • 22. ICIS / J&M chemical market survey ‘09 Three quarters of respondents report that their organisation‟s level of demand has decreased over the last 6 months Total decreased = 75% Total increased = 14% Q. How has the level of demand changed for your company over the last 6 months? Base: all respondents (275) 22
  • 23. ICIS / J&M chemical market survey ‘09 Around a third of respondents‟ organisations have taken none of the actions listed to manage output over the last 12 months. 30% have introduced short term shut-downs for additional / accelerated maintenance Q. Which of the following actions has your company been using to manage output over the last 12 months? Base: all respondents (275) 23
  • 24. ICIS / J&M chemical market survey ‘09 38% of respondents report that 1-20% of the asset capacity is currently excess to demand Q. What percentage of your asset capacity is excess to demand at the moment? Base: all respondents (274) 24
  • 25. ICIS / J&M chemical market survey ‘09 Around a third of respondents believe that none of their suppliers are at risk from interrupting supply, however 41% believe that 1-10% of their suppliers are at risk Q. In terms of supporting at-risk suppliers and securing long-term delivery, what percentage of your suppliers are at risk of interrupting supply to you? Base: all respondents (273) 25
  • 26. ICIS / J&M chemical market survey ‘09 20% of respondents are renegotiating terms with more than 25% of their suppliers Q. What percentage of your suppliers are you renegotiating terms with? Base: all respondents (273) 26
  • 27. ICIS / J&M chemical market survey ‘09 22% of respondents rated segmenting clients‟ supply chain needs as having a high importance for their organisation Q. In terms of changing your customer offerings, please rate the level of importance of each of the following customer-focused activities your company is pursuing at the moment? Base: all respondents (various) 27
  • 28. ICIS / J&M chemical market survey ‘09 Over a third of respondents rated changing the level of sales calls / customer touches as having a high level of importance for their organisation at the moment Q. Please rate the level of importance of each of the following customer-facing activities your company is using at the moment? Base: all respondents (various) 28
  • 29. ICIS / J&M chemical market survey ‘09 Over half of respondents are not scaling back on their R&D / innovation investment Q. Is your company scaling back on its investment in R&D / innovation? Base: all respondents (275) 29
  • 30. ICIS / J&M chemical market survey ‘09 Just under two thirds are planning to bring new innovations / products to market more quickly Q. Does your company plan to bring new innovations / products to market more quickly? Base: all respondents (275) 30
  • 31. ICIS / J&M chemical market survey ‘09 The most common employment action taken is to freeze basic pay, followed by a permanent reduction in the headcount of full time employees Q. With regards to people and employment, which of the following actions has your company taken? Base: all respondents (275) 31
  • 32. ICIS / J&M chemical market survey ‘09 60% agree that the chemicals industry is a worthwhile sector for employees to enter. 38% disagree strongly that the actions being taken by their company are detrimental to the long-term viability of the business Total disagree = 48% Total disagree = 45% Q. To what extent do you agree or disagree with each of the following statements? Base: all respondents (various) 32
  • 33. ICIS / J&M chemical market survey ‘09 Just under half of respondents expect the downturn to last until the end of 2009 Q. Approximately how long do you expect the downturn in the chemicals sector to last? Base: all respondents (274) 33
  • 34. ICIS / J&M chemical market survey ‘09 Almost all believe their company will survive the downturn and the remaining 8% don‟t know Q. Do you think your company will survive the downturn / crunch? Base: all respondents (275) 34
  • 35. ICIS / J&M chemical market survey ‘09 • Key findings 35
  • 36. ICIS / J&M chemical market survey ‘09 Key findings • For the majority of respondents‟ organisations demand has decreased over the last 6 months and around two thirds of respondents expect demand in the chemical sector to decrease over the next 12 months • Over three quarters expect the level of full-time employment in the sector to decrease, although the majority of respondents feel they will still be employed in the sector in 12 months time and 60% of respondents feel the sector is worthwhile for new employees to enter • Over half of the organisations are not scaling back on their R&D investment and over half of the respondents plan to bring new innovations to market more quickly • The most common employment action taken is to freeze basic pay • Respondents typically expect the downturn to last until the end of 2009 or to the middle of 2010 and almost all believe their organisation will survive it. 36
  • 37. Appendix
  • 38. ICIS / J&M chemical market survey ‘09 What are we offering? Reed Business Insight provides business market expertise through innovative research solutions We can help you gain a valuable insight into your market place allowing you to make informed business decisions 38
  • 39. ICIS / J&M chemical market survey ‘09 Why work with Reed Business Insight?  Reed Business Insight is the independent market research division of Reed Business Information which provides business market expertise through innovative research solutions  The close relationship with market-leading brands gives us the ability to reach specialist segments of our extensive database of business decision-makers via a range of research techniques  Our team of market research professionals have a wealth of experience across different business markets and can help you gain a valuable insight into your market place, allowing you to make informed business decisions and keep you one step ahead of your competitors  Through our market-leading brands we can also provide access to research on industry trends and market intelligence within business markets  All research commissioned by clients is undertaken on a strictly confidential basis  The Reed Business Insight team believe passionately about the services we offer clients and take great pride in the research that we undertake to make sure that it is reliable, cost effective and actionable  We are a friendly team that we hope you‟ll enjoy working and discussing your research findings with 39
  • 40. ICIS / J&M chemical market survey ‘09 What do we provide our clients?  Invest time to understand your company & listen to your business requirements  Recommend the most appropriate research solution for your business  Develop a clear proposal so you know exactly how the project will work  Formulate a questionnaire or discussion guide to give you the insight you need  Source a sample from our extensive databases of business decision-makers  Manage the research programme and communicate progress of the project  Analyse the data in order to interpret what the results mean for your business  Present the findings with clear recommendations and actions 40
  • 41. ICIS / J&M chemical market survey ‘09 What are our values? Passionate about research We are an honest team that enjoy working in research and take pride in our projects B2B experts We have an in-depth knowledge of business markets and understand industry language Independent professional service We focus on flexible solutions through a reliable and professional service Voice of the customer We provide an insight into the minds of business users and end customers Actionable results We deliver meaningful findings and recommendations that can help businesses to grow 41
  • 42. ICIS / J&M chemical market survey ‘09 Meet the project team Diane Lewis, Head of Market Research. After graduating in Statistics from Bath University, Diane gained her first business-to-business research experience at BUPA. She now has 15+ years experience in research & is a full member of the Market Research Society. Diane is responsible for directing a high performance Research team and works across the whole portfolio of business markets, specialising in Property, IT, Road Transport & Travel. Tel: +44 (0208) 652 8065, email: diane.lewis@rbi.co.uk Dan Hopper, Research Manager. Dan has over 9 year‟s research experience. Initially working with Ipsos Mori and two specialist agencies he has particular expertise in online research methodologies, including panels and remote usability testing. Since joining Reed Business Insight in 2007 he has worked across a range of markets including social care, personnel and travel. Tel: +44 (0)20 8652 8192 email: dan.hopper@rbi.co.uk Kevin Puttock, Senior Research Executive. Since graduating in Marketing from the University of Plymouth, Kevin has gained several years research knowledge across the IT, science, property and financial sectors. Kevin first gained market research experience at The Research Factor. Tel: +44 (0208) 652 3742, email: kevin.puttock@rbi.co.uk Jan De Iulio, Key Account Manager. Jan will be your first point of contact and will help to identify your information requirements and guide you through the research process ensuring that any work undertaken fully meets your business objectives. Jan has worked in media and provided customers with marketing solutions for 20 years. Tel.+44 (0208) 652 8564, email: jan.de.iulio@rbi.co.uk 42
  • 43. ICIS / J&M chemical market survey ‘09 What research services do we offer? Brand Perception What do people think of your brand? Customer How do you Ad Satisfaction compare with Effectiveness How do you ensure your How much ROI is customer retention? competitors? your campaign How do you promote providing? repeat purchase? What is the impact of your ads? Web site development INSIGHT Buyer Behaviour What factors drive What do you want to purchasing decision? achieve through your What makes clients website? Market choose you rather than Structure another supplier? Product Are there any Development opportunities How do you align to increase your customers' market share? needs to your R&D? Do you have any competitive intelligence? 43
  • 44. ICIS / J&M chemical market survey ‘09 We can help you to understand…  The market‟s awareness and perception of your brand in order to differentiate yourselves from competitors and track market leader performance  The impact of your advertising campaign on the awareness and perception of your brand so that you can more effectively target your marketing communications  Your customer‟s buying cycles and purchasing habits so that you can better serve your existing customers and influence the opportunities to become the supplier of choice  The structure of your market in terms of value, volume share, pricing & distribution so that you can determine market trends, pinpoint untapped market share and establish opportunities for market entry and growth  Reactions to your innovation concepts in order to develop products and services in line with customers‟ needs and maximise the success of new market launches  Who is using your website and how the site performs in terms of usability so that you can enhance the user experience and increase traffic and length of visit per user  Customer opinion of your services, their experiences and likelihood to recommend so that you can monitor and improve customer or staff loyalty measures 44
  • 45. ICIS / J&M chemical market survey ‘09 What methodologies do we use? We handle a full spectrum of projects and methodologies  Quantitative  Mail  Qualitative  Phone  Bespoke  Face-to-face  Multi client  Online 45
  • 46. ICIS / J&M chemical market survey ‘09 46
  • 47. ICIS / J&M chemical market survey ‘09 Terms & conditions  In these terms of business “the Company” means Reed Business Information Limited and “the Client” means the company, organization or individual which has signed a Reed Business Insight proposal or quotation („Proposal‟) for market research services („‟Services‟).  All Services shall be provided by the Company upon and subject to these terms of business. No variation of or addition to these terms of business shall be effective unless specifically expressed and accepted by the parties in writing. Any variation or extension of the Services not covered in the Proposal will be the subject of a separate proposal or arrangement. The contract between the Company and the Client for the provision of Services shall incorporate these terms of business and shall be governed by and construed in accordance with the Law of England. The parties submit to the exclusive jurisdiction of the English Courts.  Reports, surveys, forecasts and recommendations („Work Products‟) delivered by the Company to the Client pursuant to the Services are the property of the Client and the Company shall keep confidential the content of all Work Product and shall not disclose or make use of any Work Product other than as authorized in writing by the Client. Unless otherwise agreed between the parties the Company will retain materials relating to the Services (including but not limited to questionnaires, tapes, discs and returns) for no more than one year from the date of the completion of the Services.  The Company shall use all reasonable commercial efforts to provide the Services in accordance with the Proposal but gives no warranty as to the accuracy of any Work Product or its suitability for any particular purpose. The Client acknowledges that delay by the Client in providing information or comment may cause the Customer to incur unbudgeted costs and agrees to pay any such costs reasonably specified and invoiced by the Company.  Copyright and other intellectual property rights („IPR‟) in Work Product and any material provided by the Client („Client Material‟) will belong to the Client. IPR in any pre-existing materials that belong to the Company and are used by the Company in providing the Services and preparing the Work Product shall continue to belong to the Company.  The Company and the Client each warrants to the other that it is entitled to authorise the other to use its trademarks as envisaged by the Proposal. All rights granted in trademarks are non-exclusive and neither party shall use the other‟s trademarks except as authorized by the Proposal and these terms of business. All goodwill shall accrue to the owner of the relevant trademark 47
  • 48. ICIS / J&M chemical market survey ‘09 Terms & Conditions  The amount payable by the Client for the Services and the Work Product are as set out in the Proposal. Unless otherwise specified in the Proposal the Client will pay 100% of the amount due within 28 days of the date the Proposal is signed or accepted by the Client. This payment is non-refundable in the event of cancellation by the Client of the Services. Any expenses incurred by the Company relating to viewing facilities, special accommodation, recruitment lists and other data obtained from third parties and any other significant specific request or requirement by the Client will be payable in addition as set out in the Proposal.  Invoices are payable within 28 days from the date of invoice. Payments set out in the Proposal exclude VAT which will be payable by the Client at the prevailing rate. The Company may charge interest on unpaid amounts at the rate of 4% above the base rate of National Westminster Bank plc from time to time.  Either the Client or the Company may by written notice terminate the provision of Services pursuant to any Proposal in the event that the other is in material breach of the terms set out in the Proposal or these terms of business or if the other goes into liquidation or becomes insolvent. This right of termination is in addition to any other rights or remedies of either party.  Except in the event of death or personal injury caused by its negligence the Company‟s liability to the Client in respect of the provision of the Services is limited to the amount paid by the Client for the Services.  The quotation supplied in these proposals or letter of offer will be valid for 8 weeks from the date of issue. If the project is commissioned after this period the Company reserves the right to amend its quotation. [Put in Proposal]  If after agreeing fieldwork dates the final research specification is not agreed by the due date the Company reserves the right to revise the quotation and/or timing.  100% of the agreed fee becomes due for payment on the commissioning of the project. Any expenses will be invoiced at the completion of the project and payment will be expected at or before the end of the month following the receipt of the invoice save in particular cases where previously agreed in writing The Client shall make pre-payments for special projects. 48