Our latest analysis from ChemEng Consulting focus on value creation for shareholders and maximizing EV in the global process industry. In today’s volatile industrial landscape, chemical and manufacturing companies are increasingly re-evaluating their position within the value chain, which is a strategic trade-off between operational simplicity and margin capture.
The following framework outlines five distinct stages of industrial maturity (L1-L5), highlighting the correlation between CAPEX, barrer entry, execution complexity, profitability.
Enterprises can maximize their value by trading off their execution capabilities (e.g. Operational Costs) with their IP(e.g. R&D costs) at optimal production value. Increasing volumes does not always represent the optimal choice, risking to move in the low margin area or high costs area. Transitioning to different levels it is the secret to unlock hidden company value, exploiting existing assets. There is no correct level, there is only the level that aligns with a firm’s risk appetite and core competencies.
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