Bold Business Logo
Close this search box.

Four Societal Mega Trends Altering Chemical Industry

Combination of photos representing chemical industry and two scientists working in lab

The chemical industry offers a plethora of products which impact virtually every aspect of our everyday lives. This industry consists of corporations that produce and manufacture industrial chemicals. They convert raw materials such as natural gas, oil, air, metals, minerals, and water into over 70,000 distinct products. While most of these products are directly purchased by consumers, including soaps, detergents, and perfumes, others are also converted to various end products. A good example of this is in Europe. There, several industries  utilize 70 percent of manufactured chemicals. Virgo Investment Group (Virgo) understands these trends and is making bold bets on the future of the chemical industry.

From a chemical engineers’ point of view, the chemical industry entails the utilization of chemical processes. This includes, but not limited to, refining methods and chemical reactions. The purpose of this is to produce an array of liquid, solid, and gaseous materials. The majority of these products can be used to produce other items, though a limited portion go to general consumers.

Virgo Investment Group’s Major Focus

Most material products have either involved one or more chemicals during manufacturing or it is chemical in origin. But over the years, there has been rapid development around food, water, urbanization, and mobility. These four global mega-trends have been greatly impacting society.

Virgo Investment Group, a Burlingame-based investment firm, believes there are market and business cycle changes related to the mega-trends that provide unique opportunities for economic growth. The company invests across industries including specialty finance, healthcare, niche industrials, media, financial services, real estate, aviation, and energy. Virgo’s investment methodology identifies market seams whereby there is either a disruption or transition in an existing paradigm. These seams can be opportunistic (timely) or a structural change (secular).

In a Bold Business interview with Flemming B. Bjoernslev, Virgo Investment Group Operating Partner, he shares the importance of understanding the impact of chemical industries in today’s mega-trends. Virgo is a private investment company that work towards preserving capital. It also raises macro-economic viewpoints to determine market trends.

“The chemical industry depends on many of the products in our daily lives that we take for granted, such as rubber plastics, polyurethanes, and other key raw materials that are so vital for our daily lives,” Flemming commented.

According to Flemming the company also focuses on the necessary trends in the society, “As we developed the theme for investment opportunities within the chemical sector, we focused on some of the core mega-trends of our times.”

The Four Mega Trends

Agrochemicals help in alleviating challenges caused by urban sprawl.  The advancements lead to more resilient crops and effective utilization of farmland. These are also answers to the growing demand in food and agricultural production.

‘’A good example of how additives can add value in the food and agro cultural industry is, for example, the fact that preservatives can help the food stay fresher,” explained Bjoernslev.

With global populations growing exponentially, there is an increase in the demand for potable water and chemicals for water treatment. Nowadays, there is a greater demand to regulate water treatments or in other words, the purification of water. “Hence, increasingly a chemical water treatment products will be vital,” the Operating Partner added.

Meanwhile, the entire way of travelling from point A to point B is also changing. The chemical industry is providing support to the recent trend of creating lighter vehicles in the automotive industry to reduce fuel consumption and improve emissions. In this trend, Flemming elaborated, “So the beauty of the new technologies with the engineered plastics is that they have found a way of creating shapes and forms that can compete with classic materials such as metal, steel and aluminum carbon fiber is an example of the alternatives to the traditional materials that have been used in the automotive industry.”

Half of the world’s population will live in urban areas in 2025. The chemical industry is providing better engineered construction materials to meet the demand of the fast growing real estate development.

Looking Through the Future

The chemical industry is a vital part of the international economy. In countless products being used by consumers, ranging from pesticides and cars to clothing and toys, chemicals are present. The future of chemical industry will appear very different than its current state. In 2020, global production will increase to 85 percent. Non-Organization for Economic Development (OECD) nations will play as major contributors to this estimated production. Furthermore, the production in OECD participating countries will focus mainly on advanced technological products. It will include specialties and bio chemicals, with non-OECD compliant countries majoring in the manufacture of high volume basic products or chemicals.

Various studies and research in chemistry and biological sciences have shown that processes in chemical industry could also play an important role in developing solutions to address environmental issues. These issues include waste management, climate change, energy efficiency, and recycling. The chemical industry has developed plenty of voluntary initiatives to elevate the standards in solving health and environment issues.  It also aims to establish sustainable and safe transportation systems. In return, the chemical industry has gained a sustainable support from both the environmental groups and government institutions to operate according to the well-defined regulations.

Safe to say, the chemical industry will play a major role in bettering society and the way people will live in the future.

Don't miss out!

The Bold Wire delivers our latest global news, exclusive top stories, career
opportunities and more.

Thank you for subscribing!