Episode 493: ExxonMobil write downs signal end of fossil fuels, need for new thinking in chemicals

The news that ExxonMobil will write down up to $20bn in asset values shows that the era of fossil fuels is drawing to a close, so chemical companies must focus on completely new strategies for long-term success.

- ExxonMobil write downs signal the end of reliance on fossil fuels
- Companies need to understand demand trends on a micro basis
- Four key megatrends for chemicals strategies are pandemic, sustainability, demographics, geopolitics
- Chemical return on capital employed is falling as over-capacity increases
- China self-sufficiency in chemicals will force plant closures, moves downstream
- With or without a deal, Brexit is a disaster for UK industry
- Boston Consulting Group analysis shows Jan-June 2020 chemicals Total Shareholder Return (TSR) was -11% driven by falling sales and profits
- By 2021 expect significant bounceback to 2019 levels driven by prices and volumes
- Chemical companies must analyse role in circular economy/sustainability agenda

Podcast interview with Andreas Gocke, managing director and senior partner at Boston Consulting Group; Nigel Davis, ICIS Insight Editor; Paul Hodges, chairman of New Normal Consulting and John Richardson, ICIS senior consultant for Asia.