Pricing in the Chemical Industry

| June 6, 2019

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In hardly any other sector do companies find themselves exposed to such a fierce price competition as in the chemical industry. In order to strive for the goal of profit maximization and to establish themselves on the market in the long term, chemical producers are entering a direct and exhausting competition. In this competition, manufacturers set their prices based on their manufacturing costs and constantly try to minimize them so they can reduce their own product prices and undercut the competition with regard to their prices. Industry experts are almost unanimous in their view that direct competition is not necessary in many cases, in which only a few companies will prevail in the long run. In this blog post, we explain which factors influence chemical prices and how chemical companies circumvent the commodity trap through a pricing strategy. It is no secret that there is high price volatility in the chemical industry. However, only a few people are aware of what causes this volatile environment. In order to understand why chemicals are subject to recurring price fluctuations, it is necessary to take a look at oil production. Around 96 percent of all organic chemicals are largely produced from crude oil.

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Our mission is to make life healthier by creating responsible products that protect people and their environments from the impact of insects. A familly-run company since 1902, MGK® has achieved over 100 years of growth through the development and delivery of innovative insect control products that meet the needs of our valued customers in diverse markets including consumer products, crop-protection, and professional pest control. Our employees successfully combine the talent and teamwork to insure continued growth into the future!

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