04-08-2025
Petrochemical Consolidation to Accelerate Globally; India Poised to Play Strategic Role: BCG Report
The global petrochemical sector is set to undergo significant consolidation, driven by prolonged low margins, overcapacity, and shifts in regional growth patterns, according to a new report by Boston Consulting Group (BCG) titled 'Preparing for the Next Wave of Petrochemical Consolidation.'
The report points to a steep drop in sector profitability, with average ROCE falling from 8% in 2019 to ~4% in 2024, and highlights that capacity additions in several regions are outpacing demand growth. These conditions are accelerating rationalization and consolidation efforts, as companies seek to remain competitive in an increasingly challenging environment.
India: A Regional Growth Engine in the Making
India is uniquely positioned to emerge as a regional consolidator, given its robust domestic demand and expanding manufacturing capacity. With an eye on this strategic opportunity, Indian petrochemical players must now look beyond organic growth to targeted M&A, vertical integration, and investment in technological and sustainability capabilities.
Commenting on the opportunity ahead, Kaustubh Verma, Managing Director & Partner, Energy Practice, BCG, said, 'As the global petrochemical landscape moves toward a new phase of consolidation, India stands at a strategic inflection point. With strong domestic demand and a growing manufacturing base, Indian players have the opportunity to carve out regional leadership by leveraging targeted M&A, securing critical feedstock access, and strengthening their technology and sustainability edge. To stay competitive, companies must proactively assess their portfolios and prepare for multiple market scenarios, those who act decisively now will be better positioned to capture long-term advantage.'
Key Highlights from the Report:
Margin Pressure is Here to Stay: With slow demand growth and increasing production capacity, global petrochemical players face tighter margins and the need for operational efficiency.
M&A and Rationalization to Dominate Strategy: Capacity rationalization and strategic M&A will likely dominate boardroom discussions over the next few years.
India Well-Placed for Strategic Expansion: India's domestic market growth, coupled with maturing industrial capacity, positions it as a potential consolidator in the region.
Call to Action: The report urges petrochemical companies to reassess their portfolios, anticipate multiple market scenarios, and move early to capture the next wave of advantage.
Please find the full report here: Preparing for the Next Wave of Petrochemical Consolidation
