On the occasion of PU China 2018, one of China’s major polyurethane trade fairs, German materials manufacturer Covestro held an “Innovation PLUS” conference to showcase how one of the leading producers of raw materials for polyurethane is seizing the opportunities of digitalization in China and beyond.
The conference took place in Shanghai and attracted more than 200 customers and partners from the polyurethane industry. The company showcased its “Digital@Covestro” initiative and the future-oriented, customer-centric solutions it is working on. Focusing on the digitalization of operations, customer experience and new business models, key industry stakeholders and representatives exchanged ideas on how the digitalization of the chemical industry can contribute to make the world a brighter place.
“China not only is our single biggest market, but is also at the forefront of digitalization. The Chinese government strongly supports the transformation of its economy towards innovation, and the whole country is progressing rapidly down this path,” said Daniel Meyer, Head of the Polyurethanes Business Unit at Covestro. “We are determined to be part of this transformation, utilizing our experience in this market and applying new learnings on innovation to solve some of the world’s biggest challenges. We intend to lead the digitalization of the chemical industry with the same speed and skill that China has achieved in digital developments over the last few years.”
Transformation of an industry
According to McKinsey Global Institute (MGI), China’s digital technologies are set to transform and create 10 to 45 percent of industry revenues by 2030. Digitalization opens up many new opportunities for the entire chemical and plastics industry as data and computing power become increasingly available and connectivity grows both in production and along the entire value chain. According to a recent study by the World Economic Forum, digitalization's economic gains in the global chemical and materials industry are expected to reach 310 to 550 billion US Dollar between 2016 and 2025.
In line with the ambition to seize the opportunities of digitalization, Covestro has embedded digital technologies and working methods in production, logistics, research and development. Digitalization also forms an integral part of all touchpoints with customers as well as in the development of new business models, with a focus on tangible benefits for customers. The three main focus areas are:
Digitalization opens up new ways of connecting people and exchanging information faster than ever before. Applying digitalization in business operations allows both Covestro and its customers to optimize safety and efficiency by following a digital, fully integrated and data-based approach, including digital research and development.
One example of this is “Climate Correction”, a high-tech process that uses algorithms to control key foam properties according to varying climate conditions, allowing a more efficient use of raw materials and an improvement in production processes for foam manufacturers.
Digital customer journey
Covestro wants to leverage the opportunities of digitalization to develop a customer-centric approach that reflects the needs of customers as digital natives. By reaching out to customers via all digital touchpoints, from the first inspiration for a product to after sales support, Covestro wants to support dynamic decision making and individualized offers to bring added value.
One important cornerstone of this for 2018 is the successful relaunch of Order@Covestro, a global online ordering platform that increases transparency and efficiency in order processes.
Digital business models
Covestro has developed an innovative digital marketplace for chemicals, designed in dialogue with customers and based on their demands. In the future, they will be able to buy standard products from the range of polymers at current market prices online, all in just a few clicks. Covestro is also planning to broaden the platform to include the distribution of tested basic products and services from third-party providers.
Along with its own marketplace, the company also leverages on existing ecosystems. For example, it launched a flagship store on Alibaba’s 1688.com, China’s biggest B2B platform, aiming to provide more efficient service to small- to medium-sized customers in China.
“Our recent global polyurethanes market study shows that our customers from key end-markets are paying more and more attention to digitalization due to its huge business potential,” said Marius Wirtz, Head of Commercial Operations for Covestro’s Poluyrethanes business in the Asia Pacific region. “However, these customers are still at an early stage of digital transformation and may need support to make the most of the opportunities stemming from increasing digitalization. That is where we want to help by digitalizing our day-to-day operations, customer journey and business model in partnership with our customers.”
With 2017 sales of EUR 14.1 billion, Covestro is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, construction, wood processing and furniture, and electrical and electronics industries. Other sectors include sports and leisure, cosmetics, health and the chemical industry itself. Covestro has 30 production sites worldwide and employs approximately 16,200 people (calculated as full-time equivalents) at the end of 2017.
Find more information at www.covestro.cn.
This news release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro’s public reports which are available at www.covestro.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.