SUPPLY CHAIN DISRUPTION IN CHEMICAL INDUSTRY
Chemicals & Specialty
According to the report, the chemical industry
contributes to global Gross Domestic Product (GDP)
through indirect, direct, and induced impacts,
equivalent to 7% of the overall world's GDP, and
supporting around 120 million jobs worldwide. It is
offering materials and substances to sectors such as
agriculture, automotive, construction, and nutrition.
The chemicals market is currently transforming post-
COVID-19 pandemic, so chemical companies need to
adopt new technologies in their operating models,
businesses, and processes. In the global chemical
industry, the supply chain management will face new
challenges and new opportunities.
Therefore, it is critical to understand key
developments in the chemicals market and the
resulting impact on the individual supply chain. Only
then will companies have the proper preparation to
face these challenges and seize the opportunity to
create a long-term competitive advantage.
Nature of COVID-19 Impact on Chemical Industry
Leading chemical producers are reducing operational and capital expenditure in the face of the COVID-19 crisis. These
companies' manufacturing operations have been scaled down to 40%-60% capacity due to disruptions in raw material supply
and labor shortages. In February 2020, the global chemical production was dropped by 2.4%, with the Asia-Pacific posting a
3.9% production decline in the same month. According to the China National Bureau of Statistics, the country's chemical
manufacturing fell by around 20% compared to the previous year, while profits declined by 66%.
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Considering the COVID-19 impact on chemical categories, it has seen that each type of chemical witnessed a decline in
production. For instance, the production of synthetic rubber and specialty chemicals, such as paints and coatings, witness a
downfall of 7