Chemical ... Evolving operations and reporting standards are raising expectations for responsible business practices, bringing greater attentiveness to environmental, health and safety

Chemical

Breaking through the barriers to

dramatically enhanced revenue, EBITDA

results, and risk management across a

dynamic chemical and process

industry value chain.

MainePointe.com

Boston Vancouver Schaffhausen Shanghai

http://www.mainepointe.com

A New Pathway to a More Dynamic, Fully Optimized Strategic Supply Chain

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Maine Pointe drives profitable business transformation through

n Operations Excellence

n Strategic Procurement

n Logistics

…and uniquely integrated approaches to Sustainability and Organizational Improvement.

A New Pathway

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“The Maine Pointe team

applied a ‘roll up your

sleeves and get to work’

approach to our engagement

that identified areas for

improvement as well as

detailed processes to

implement and monitor

the success in sales and

operations planning,

maintenance and operations

excellence. Their team

blended seamlessly with

our personnel. We feel that

our investment in Maine

Pointe was well worth it; the

project rendered the tools

and processes necessary for

us to sustain improvements.”

Luther C. Kissam, IV

President

Albemarle Corporation

For some time now, chemical companies have been diversifying their mix of products and customers to improve margins and stimulate more consistent revenue growth. Concerns over economic factors – such as unstable foreign exchange rates and fluctuating oil prices – have focused industry leaders on selling assets and acquiring new businesses as a means to gaining market share and enhancing EBITDA.

While this strategy has been successful, it has often injected more

complexity into operations or instigated havoc upon the supply chain.

There are factors that are now converging to alter the competitive context

– such as greater demand for ever more scarce raw materials, rising energy

costs, and demographic shifts. Smart CEOs are already responding with a

greater emphasis on differentiated products and service models in addition

to implementing alternative production methods (such as lean principles

and automation). They are also transitioning to greater segmentation of

their customers’ supply chain requirements.

Regionally-focused chemical companies are looking to scale globally

at the same time that the large market leaders are going more vertical

in an effort to create new niche opportunities. Cyclical sectors, such as

commodity chemicals, are restructuring as those companies become more

specialized to ward off encroachment from private equity firms looking for

deal opportunities.

Companies expanding overseas are navigating tax and regulatory

obligations along with license to operate and stakeholder issues. As they

divest from their installed base and relocate operations to more financially

advantageous footprints – issues of centralization, rationalization, cost

management and intellectual property engender tensions with tax

authorities in a complex web of global asset restructuring. Ongoing

development issues in emerging markets such as Eastern Europe, India,

and China are requiring companies to apply new approaches to a range

of operational concerns.

Chemical CEOs continue to be concerned about market and financial

volatility amidst global trends toward more regulation, proactive

government oversight, and public sector investments in commerce.

Nevertheless, they are hedging their odds and penetrating new markets –

especially regions where their presence may be limited or non-existent – such

as China and Brazil. Rather than building research facilities, their focus is

on scaling manufacturing operations, leveraging a range of local resources

– including human capital (via training and development) – and engaging

new customers.

Attracting and developing the next generation of skilled workers at all

levels remains a potential impediment for capacity building in the near

term. As company leaders address this gap, more senior personnel are

being pulled from their native posts and assigned to new, or developing,

market initiatives to help ensure a successful build out.

Evolving operations and reporting standards are raising expectations

for responsible business practices, bringing greater attentiveness to

environmental, health and safety concerns as well as transparent

financial practices. Company leaders are increasingly viewing safe work

environments, sound financial standards, reducing pollution levels, and

improving energy and resource utilization as pathways to more

durable competitiveness.

Don’t Be Fooled into Going it Alone

Chemical and process industry companies are compelled to develop

operational efficiencies and quality management standards unlike what

they have achieved before. They must reinvent many aspects of their

business model in order to support a renewed priority around optimizing

the supply chain as a driver of operations excellence, competitive

agility, and risk resiliency.

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Achieving supply chain optimization will require greater utilization of

e-procurement technologies, lean manufacturing, outsourcing non-

core activities, reducing cash-to-cash cycles and minimizing material

inventories. By focusing on the full range of operational improvements –

including enhanced sales and operations planning, distribution and

delivery – companies can significantly lower costs while converting their

supply chain into a differentiated driver of perpetual growth.

Many chemical leaders have not focused on building a depth of supply

chain expertise or transferring best practices from other industries. Their

teams have necessarily concentrated on solving day-to-day issues and

executing on current initiatives to keep up with immediate priorities.

It’s common to underestimate the importance of practical, on-the-ground

supply chain experience to deliver results quickly. Companies tend to

go it alone but if they do hire a consultant they retain one with singular

chemical industry experience. Trouble is, those options are what everyone

else does and the result is more of the same.

Collaborating with a trusted advisor who can integrate extensive chemical

and process industry experience with cross-modal logistics expertise,

frontline operations implementation, and multi-industry insights on global

procurement practices can be a game-changing tactic. Engaging such a

resource can put the best ‘feet on the ground’ to achieve bottom-line

results more quickly than an internal team can on its own.

As a result, company leaders and facility managers become better able to

calculate and build capacity for meeting true real-time demand. They’ll

no longer be held hostage to reactionary or impulsive responses to

expectations that are not validated.

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The Difference We Make

Maine Pointe works with all types of chemical and process industry companies

– from basic, commodity and agricultural to specialty and consumer entities.

We dramatically compress the cycle to greater profitability and cash flow with

less upfront investment in time and resources.

Our specialists offer deep frontline experience across the entire chemical

and process industry value chain to effectively align facilities, capabilities,

processes and strategic initiatives for long-term advantage. By leveraging

the right combination of functional competencies, we deliver innovative

cost-saving business transformation solutions that are accountable and

measurable. We reorientate supply chain operations from the traditional

Total Cost of Ownership model to Maine Pointe’s next-generation Total Value

Optimization (TVO) framework.

Redefining the Results You Should Expect

Maine Pointe consistently delivers an average engagement ROI of 6:1

to 10:1, supported by a guaranteed 2:1 ROI based on annualized savings.

Our industry engagement successes include:

Saving 7-10% in the direct spend for key raw materials of many

specialty chemical manufacturers – including companies that serve

the garment, pharmaceutical, consumer product, film, food thickener

and LCD screen markets.

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Achieving a 4:1 ROI in Procurement for a cosmetic formulator.

Saving 6-18% for a number of different industry leaders by optimizing

their network, upgrading supplier contracts, and shifting truck load to rail.

Reducing Logistics costs 17% for a producer of refractory products.

Assisting in removing 8,000 trucks from the Logistics spend

of a synthetic polymer company while significantly advancing

achievement of their corporate Sustainability goals.

Improving Overall Equipment Effectiveness (OEE) for an agricultural

chemical company from a 52% rate to 63% and