Global chemicals leader

Development footprint optimization

Background

The company was formed in 2001 through the polyolefins businesses of two major (oil and chemicals) conglomerates, with HQ in NL.
In Europe and North-America, the company was market leader in the PP market. They were the second largest producer of LDPE in the World, and the largest European producer of HDPE.
They were not a market player on the LLDPE market, although it is the fastest growing polyethylene market.
Upon its inception, the company had production centers in 18 countries and were generating revenues of €6.8b.
Company needed to improve its competitiveness towards Borealis, Atofina and Sabic through optimizing its (fundamental) R&D and Application Center footprint.

Business Relationship

At the time of and with roots in Gemini Consulting, the team was tasked with optimizing the European footprint in the first place.
At the end of our European optimization initiative, the company R&D Head was retiring.
Due to the success, our client was subsequently promoted to President R&D and member of the Board, and asked us to replicate the initiative, but now on a global scale.
At this time, the combination with another chemicals group was formed, doubling the size of the company.

Approach

Started our engagement with a detailed analysis of the footprint across activities, assets, markets, and people.
Combined this with detailed cost decomposition of the sites and developed alignment with corporate strategy.
Focused our efforts on three key levers:
- R&D Programme Redirection (effectiveness)
- Site Restructuring (opex and capex)
- New Ways of Working (opex)
Modelled the viable scenarios for an optimal footprint.
Created Centers of Excellence and redistributed the assets over a smaller footprint.
Developed implementation scripts per center of core competency (CCC) and site.

Results

Consolidated number of Application Centers and (Fundamental) Research sites from 16 to 7.
Reduced FTE base by 237 people.
Delivered €41M in benefits (on an original target of €35.9M).
Restructuring cost were less than half of original budgeted (€5.1M vs €11.6M).

JENTS International

JENTS International is an advisory company specialized in identifying and realising operational performance improvements at accelerated pace for Private Equity and (Portfolio) Companies.

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