WEBVTT NOTE This file was generated by Descript 00:00:01.170 --> 00:00:05.370 Welcome to The Chemical Show, the podcast where Chemical means business. 00:00:05.910 --> 00:00:09.720 I'm your host, Victoria Meyer, bringing you stories and insights 00:00:09.720 --> 00:00:13.590 from leaders driving innovation and growth across the chemical industry. 00:00:14.520 --> 00:00:18.840 Each week we explore key trends, real world challenges, and the 00:00:18.840 --> 00:00:20.610 strategies that make an impact. 00:00:20.910 --> 00:00:21.720 Let's get started. 00:00:23.587 --> 00:00:24.767 victoria_2_08-18-2025_085915: Welcome back to the Chemical 00:00:24.767 --> 00:00:27.617 Show where Leaders Talk Business. 00:00:28.192 --> 00:00:33.202 We have just wrapped up the second quarter earning seasons, and it's no surprise 00:00:33.232 --> 00:00:37.632 that it's been mixed results depending on where in the industry you sit, et cetera. 00:00:37.632 --> 00:00:37.962 So. 00:00:38.377 --> 00:00:42.907 Today's podcast episode is really about bringing to you second quarter 00:00:42.937 --> 00:00:48.187 earnings insights, and what it means for the industry and what it means 00:00:48.187 --> 00:00:52.387 for you as a leader as we lead through chemical industry transformation. 00:00:52.747 --> 00:00:56.467 So I'm gonna be unpacking some of these insights and also tying it 00:00:56.467 --> 00:00:59.797 into the themes and advice that we've been discussing this year. 00:01:00.027 --> 00:01:04.587 And talk about what you can and should be doing as you go through the 00:01:04.587 --> 00:01:07.407 second half of 2025 and into 2026. 00:01:07.407 --> 00:01:11.577 I know that we are in the midst of business planning, budgeting, 00:01:12.177 --> 00:01:16.677 not just finishing out the year, but really looking ahead to what 00:01:16.677 --> 00:01:18.987 next year will be and how you. 00:01:19.372 --> 00:01:23.842 And your company and your business will be running, leading, growing, managing, 00:01:23.902 --> 00:01:25.702 navigating, all of those things. 00:01:25.982 --> 00:01:30.242 One of the things I really wanna talk about as well as there is still time 00:01:30.272 --> 00:01:32.912 for you to attend the Chemical Summit. 00:01:33.182 --> 00:01:36.422 In fact, if you're gonna do one thing to set yourself up for 00:01:36.422 --> 00:01:38.192 success for the coming year. 00:01:38.772 --> 00:01:39.942 Attending the Chemical Summit. 00:01:39.942 --> 00:01:44.562 So it's being held on September 30th and October 1st in Houston, Texas. 00:01:44.682 --> 00:01:48.702 And it is a great opportunity for leaders, senior leaders, mid-level 00:01:48.702 --> 00:01:53.442 leaders, leaders, rising leaders to engage and set the stage for 00:01:53.442 --> 00:01:56.142 2026, not just for your company. 00:01:56.172 --> 00:01:57.552 And that's super critical. 00:01:57.552 --> 00:02:00.162 And in fact, that's, I know where the, a lot of the investment 00:02:00.162 --> 00:02:00.887 is when we think about what. 00:02:01.637 --> 00:02:03.107 People are doing where they're spending their money. 00:02:03.107 --> 00:02:06.377 It's on investing in the business, but it's also about investing in 00:02:06.377 --> 00:02:10.347 you as a leader, in terms of the insights that you bring to the table, 00:02:10.377 --> 00:02:14.937 the connections that you are making with other leaders in the industry. 00:02:15.227 --> 00:02:18.977 And more so the Chemical Summit goes beyond the typical 00:02:18.977 --> 00:02:20.387 industry conference, right? 00:02:20.447 --> 00:02:24.257 And it's the form where leaders can go beyond this idea of 00:02:24.467 --> 00:02:25.817 we're already being strategic. 00:02:26.097 --> 00:02:29.277 And test whether their actions are really moving the needle and 00:02:29.277 --> 00:02:30.717 how other leaders are doing that. 00:02:30.717 --> 00:02:33.687 So you get to do three things throughout this conference, and I 00:02:33.687 --> 00:02:36.297 think these are some of the three value points that you get to bring, 00:02:36.477 --> 00:02:39.777 uh, that we bring to the table for you, which is number one, benchmarking. 00:02:39.837 --> 00:02:41.672 Compare how your approach a. 00:02:42.432 --> 00:02:46.422 Is in your company's approach against peers who are already gaining traction. 00:02:46.512 --> 00:02:47.292 What are they doing? 00:02:47.292 --> 00:02:51.582 How are they tackling the opportunities and the obstacles in business today? 00:02:51.972 --> 00:02:54.132 Number two, it's the conversations and connections. 00:02:54.132 --> 00:02:57.672 I hear this over and over again from people that are there. 00:02:57.702 --> 00:03:03.132 These are amazing connections and their connections that are much deeper than what 00:03:03.132 --> 00:03:04.542 you're gonna get at a typical conference. 00:03:04.542 --> 00:03:07.422 'cause you're not just sitting and listening or going through 00:03:07.422 --> 00:03:10.872 a trade show booth, but you're actually conversing with peers. 00:03:11.447 --> 00:03:14.507 In the room leaders doing the same thing that you're doing. 00:03:14.507 --> 00:03:16.187 So great opportunity there. 00:03:16.187 --> 00:03:19.817 And then the third piece is really about around being future focused. 00:03:20.057 --> 00:03:24.977 What are the tools and insights that will help you lead through the next shifts 00:03:25.037 --> 00:03:29.117 and the current shifts and the next shifts, whether the AI and sustainability, 00:03:29.117 --> 00:03:32.627 geopolitics, supply chain regionalization. 00:03:32.627 --> 00:03:34.127 We're gonna be talking about that a little bit more. 00:03:34.422 --> 00:03:37.272 Setting yourself up for success before they hit the earnings. 00:03:37.322 --> 00:03:42.572 Because we know the path that you're on manifests over the 00:03:42.572 --> 00:03:44.492 next 6, 12, 18 plus months. 00:03:44.492 --> 00:03:47.312 And so doing the right things and understanding how to tackle 00:03:47.312 --> 00:03:49.022 those things is critical. 00:03:49.635 --> 00:03:56.276 So if you're ready to set your leadership and your business on the 00:03:56.276 --> 00:04:01.316 right trajectory heading into 2026, join us at the Chemical Summit. 00:04:01.346 --> 00:04:03.626 You can visit the chemical summit.com 00:04:03.626 --> 00:04:04.226 to learn more. 00:04:04.916 --> 00:04:06.236 Alright, hope to see you there. 00:04:06.476 --> 00:04:08.456 Now let's talk about where we are. 00:04:08.807 --> 00:04:10.907 Just past midyear, we've just wrapped up. 00:04:10.907 --> 00:04:12.407 Second quarter earning season. 00:04:12.407 --> 00:04:14.567 There's probably a few people, companies still trickling in 00:04:14.567 --> 00:04:16.337 with results by and large. 00:04:16.337 --> 00:04:17.477 No surprise to you. 00:04:17.477 --> 00:04:18.137 No surprise to me. 00:04:18.767 --> 00:04:19.697 Mixed Right. 00:04:19.727 --> 00:04:23.627 So that's where I'm gonna say is the theme of this is really mixed, and I 00:04:23.627 --> 00:04:27.977 think it depends on where in the industry you sit, whether you're a commodity 00:04:27.977 --> 00:04:33.977 player or a specialty player, whether you are heavily invested in certain 00:04:33.977 --> 00:04:37.747 markets or, invested in, anchored to certain markets, whether you're broader. 00:04:37.987 --> 00:04:39.577 So, you know, what are we seeing? 00:04:40.192 --> 00:04:44.692 Commodity chemicals, commodity chemicals, petrochemicals, plastics, right? 00:04:44.722 --> 00:04:48.622 Overall weak demand, oversupply, and a lot of pricing pressure. 00:04:48.622 --> 00:04:50.302 We've been seeing this, we've been hearing it. 00:04:50.302 --> 00:04:51.022 No surprise. 00:04:51.390 --> 00:04:53.880 Go listen to my recent episode with John Richardson. 00:04:53.910 --> 00:04:57.450 And we'll link to that in the show notes to talk about where some of this pressure 00:04:57.450 --> 00:05:01.650 is, particularly in the petrochemical and the polymers value chains, 00:05:01.930 --> 00:05:05.530 , around petrochemical, oversupply, Chinese competition, et cetera. 00:05:05.530 --> 00:05:05.650 So. 00:05:06.050 --> 00:05:09.650 We're seeing losses, we are seeing shutdowns, particularly across Europe, 00:05:09.800 --> 00:05:13.700 and that's looking at companies like Dao, BASF, lion Buell, right? 00:05:13.700 --> 00:05:17.840 So difficult business environment that they're taking some real 00:05:17.840 --> 00:05:18.860 focused efforts to resolve. 00:05:19.700 --> 00:05:22.760 So some of the key levers that we're seeing is around cost cutting. 00:05:22.820 --> 00:05:25.190 , Including cutting the dividends, which is always, by the way, 00:05:25.190 --> 00:05:26.990 guys, you know, that's a big deal. 00:05:26.990 --> 00:05:31.040 When a company cuts its dividends, it's a big sign because companies 00:05:31.040 --> 00:05:32.330 don't like to cut dividends. 00:05:32.637 --> 00:05:36.527 Shutting down plants, restructuring a lot of capital disciplines. 00:05:36.527 --> 00:05:38.657 So that's really on this commodity space. 00:05:38.927 --> 00:05:43.307 When we look at specialty chemicals, it's actually a little bit brighter right now. 00:05:43.652 --> 00:05:44.552 Not everywhere. 00:05:44.552 --> 00:05:48.242 It depends on the market that you're in and the end use application, but 00:05:48.512 --> 00:05:50.972 generally more resilient performance. 00:05:51.002 --> 00:05:54.152 And you know, looking at companies like clearing It, which beat its 00:05:54.152 --> 00:05:55.952 expectations for the second quarter. 00:05:56.372 --> 00:06:00.692 Leny had weak volumes, but they're aggressively restructuring Science 00:06:00.692 --> 00:06:05.202 Co inev which has made a lot of portfolio shifts over the past. 00:06:05.687 --> 00:06:09.327 Year or two and they've had some great earnings that have come through. 00:06:09.327 --> 00:06:13.057 So I think it's around, what we're seeing, especially when we look at the difference 00:06:13.057 --> 00:06:17.893 between commodity and specialty, is regionalization versus globalization. 00:06:18.412 --> 00:06:20.452 More resilient markets, right? 00:06:20.452 --> 00:06:24.772 I mean that ultimately is the story for specialty a lot, is that you're 00:06:24.772 --> 00:06:28.702 getting value through differentiation as opposed to in some of these more 00:06:28.732 --> 00:06:32.902 commoditized markets where it's value through being a effective COS 00:06:32.902 --> 00:06:34.282 player, bigger is better, et cetera. 00:06:34.282 --> 00:06:34.612 Well. 00:06:34.972 --> 00:06:36.502 Today, bigger is not better. 00:06:36.905 --> 00:06:40.235 but overall, I think what we're seeing and what I'm hearing as I go out and talk 00:06:40.235 --> 00:06:44.645 to leaders is this idea that specialties just are having more resilience. 00:06:44.645 --> 00:06:46.955 There's selective growth, not easy. 00:06:47.325 --> 00:06:49.695 Nobody is saying that 2025 is easy. 00:06:49.695 --> 00:06:51.845 I think, those easy days are over. 00:06:52.175 --> 00:06:53.495 We're hoping they come again. 00:06:54.035 --> 00:06:58.260 Probably not in 2026, but, but going forward, Let me just break 00:06:58.260 --> 00:06:59.220 this down though a little bit more. 00:06:59.220 --> 00:07:01.860 That's kind of the high level in terms of the differentiation between 00:07:01.860 --> 00:07:04.290 specialty and commodity and the fact that we've got a mixed bag. 00:07:04.680 --> 00:07:07.500 \ Number one, what's coming through persistent weak demand 00:07:07.500 --> 00:07:08.760 and macroeconomic stress? 00:07:09.270 --> 00:07:12.960 You know, I think if we just start talking about tariffs and the uncertainty 00:07:13.170 --> 00:07:17.610 that tariffs has brought, that is a certain play on macroeconomics. 00:07:17.610 --> 00:07:21.210 We, while we say we're not really in inflationary times, there's. 00:07:21.245 --> 00:07:24.155 Certainly some demand destruction. 00:07:24.185 --> 00:07:26.735 Um, I think we've seen declines across that. 00:07:26.735 --> 00:07:29.265 And, companies are warning of slower growth, whether it's 00:07:29.265 --> 00:07:32.385 BASF, Dow is making some shifts. 00:07:32.475 --> 00:07:36.675 Otherwise, you know, if we look at Europe, um, Europe is under stress 00:07:36.675 --> 00:07:37.665 for a lot of the policies now. 00:07:37.665 --> 00:07:40.545 They've recently come through with some new. 00:07:41.335 --> 00:07:42.835 Statements and policies. 00:07:42.835 --> 00:07:45.955 I think some people, some chemical companies might be saying 00:07:45.955 --> 00:07:48.835 it's a little bit too little, too late, um, but we'll see. 00:07:48.835 --> 00:07:52.405 But consistently, uh, what we're seeing as we look through earnings 00:07:52.405 --> 00:07:56.155 reports is this idea of weak demand and just macroeconomic stress. 00:07:56.155 --> 00:08:01.015 We are in a period of just disruption. 00:08:01.375 --> 00:08:03.385 Um, and I think that's the best way to think about it. 00:08:03.385 --> 00:08:05.215 And that disruption is causing stress. 00:08:05.908 --> 00:08:10.078 The second theme that's coming through, and again, this is no surprise, we 00:08:10.078 --> 00:08:14.908 have been talking about this for over a year, and it's around this idea of 00:08:15.028 --> 00:08:18.598 operational excellence and uh, cash focus. 00:08:18.628 --> 00:08:22.348 And so that is coming through and that's paying dividends. 00:08:22.472 --> 00:08:24.302 For some people cash is king, right? 00:08:24.302 --> 00:08:29.132 So I think what we're seeing is this bigger focus on cost, 00:08:29.132 --> 00:08:31.232 discipline, operational excellence. 00:08:31.232 --> 00:08:35.162 Now, the downside of this is it is also manifesting in. 00:08:35.657 --> 00:08:36.527 Plant closures. 00:08:36.927 --> 00:08:41.777 It's manifesting in some, layoffs and certainly we saw, the latest I 00:08:41.777 --> 00:08:46.007 saw last week was CP Chem announcing some additional layoffs, which maybe 00:08:46.007 --> 00:08:49.367 is part of their overall 20% cut, which is by the way, a big cut. 00:08:49.697 --> 00:08:54.258 , But companies are really prioritizing this cash generation, Now what that's 00:08:54.258 --> 00:08:56.958 not saying is that they're not investing. 00:08:56.988 --> 00:08:58.878 There is still continued investment, right? 00:08:58.878 --> 00:09:04.998 So investment in the right places, but absolutely a cash is king focus. 00:09:05.388 --> 00:09:08.898 Um, which, you know, let's be honest, their investors would say, yes, please 00:09:08.958 --> 00:09:14.508 pay attention to the cash because your overall economic situation is not ideal. 00:09:14.558 --> 00:09:19.448 Again, for all these other reasons, macroeconomic, stress, right disruption. 00:09:19.820 --> 00:09:23.750 Some, uh, demand declines and oversupply certain when we look at certain 00:09:23.750 --> 00:09:28.460 markets, petrochemical, plastics, et cetera, dramatic oversupply. 00:09:28.520 --> 00:09:33.050 And then when we look at, depending on, uh, what markets you feed into, right? 00:09:33.050 --> 00:09:34.580 So automotive is still struggling. 00:09:34.823 --> 00:09:37.223 it's on the struggle bus for a long time, and I don't know about you. 00:09:37.643 --> 00:09:39.563 I personally haven't bought a car in a while. 00:09:39.563 --> 00:09:41.993 I'm about ready to, um, buy a new car. 00:09:41.993 --> 00:09:44.998 But I think that's one of the things when you just look around at who's. 00:09:45.728 --> 00:09:47.048 Where are people spending their money? 00:09:47.318 --> 00:09:51.948 It's not necessarily on, some of the things that certain markets would like. 00:09:52.008 --> 00:09:56.478 Um, so maybe go buy a car and save the chemical industry or save 00:09:56.478 --> 00:09:57.618 parts of the chemical industry. 00:09:58.292 --> 00:10:00.347 you know, I think there's the other pieces around this. 00:10:01.217 --> 00:10:04.217 Focus on strategic investment and long-term focus. 00:10:04.433 --> 00:10:09.473 I think one of the dangers in business planning at every level 00:10:09.623 --> 00:10:11.363 is the hockey stick, right? 00:10:11.363 --> 00:10:13.223 And you guys know the hockey stick, right? 00:10:13.223 --> 00:10:15.833 It's like, it's gonna be stinky this year. 00:10:15.833 --> 00:10:16.643 It's not gonna be great. 00:10:16.643 --> 00:10:17.753 We're gonna be flat, flat, flat. 00:10:17.783 --> 00:10:20.603 And all of a sudden miracles are gonna happen. 00:10:20.603 --> 00:10:26.153 And next year, two years from now, the market's gonna pick up and it's gonna be. 00:10:26.843 --> 00:10:28.313 Skyrocketing market. 00:10:28.847 --> 00:10:31.787 I'm not seeing so much on the hockey sticks and people aren't talking 00:10:31.787 --> 00:10:35.837 about that, but they're absolutely deferring the point of view that 00:10:35.837 --> 00:10:36.677 things are gonna get better. 00:10:36.677 --> 00:10:41.567 Until 2026, we were hearing parts of the idea that, ooh, second 00:10:41.567 --> 00:10:43.367 half of 2025 is gonna get better. 00:10:43.637 --> 00:10:45.317 I think we're just pushing that down the road. 00:10:45.417 --> 00:10:47.450 And that's something that, is. 00:10:47.840 --> 00:10:51.500 Probably no surprise to you, but I think this whole idea that we're pushing, um, 00:10:51.500 --> 00:10:53.847 that down the road, what does this mean? 00:10:53.847 --> 00:10:58.317 So, okay, I'm not, I'm not going through the deep dive of all these, 00:10:58.377 --> 00:10:59.547 earnings reports you guys have. 00:10:59.547 --> 00:11:03.567 I'm giving you some of the highlights, but what does it mean and how do you 00:11:03.567 --> 00:11:05.997 need to be thinking about business today? 00:11:06.702 --> 00:11:09.462 For the second half of 2025 and going into 2026. 00:11:09.732 --> 00:11:13.482 Number one, there's this whole idea of this global demand shifts, right? 00:11:13.482 --> 00:11:17.292 This reliance on China, we know this, we've been talking about this for a long 00:11:17.292 --> 00:11:21.702 time, that we've got some oversupply, we've got tariff exposure, we've got cheap 00:11:21.702 --> 00:11:26.052 Chinese imports that even though we've got tariffs coming in play, you know, 00:11:26.052 --> 00:11:27.732 and I think I sit in the US obviously. 00:11:27.732 --> 00:11:30.762 So that's a bit of a US-centric view, but it's applying globally. 00:11:31.182 --> 00:11:34.722 We've got regional hotspots, and regional cold spots. 00:11:34.722 --> 00:11:38.922 I guess from a strategic lens though, I think where we're at is we need 00:11:38.922 --> 00:11:40.452 to be really thinking through. 00:11:40.775 --> 00:11:44.465 Additional market diversification, additional innovation pipelines. 00:11:44.915 --> 00:11:46.955 One of the things that's been really positive and I think 00:11:46.955 --> 00:11:50.255 is a positive note, is we are seeing more innovation this year. 00:11:50.255 --> 00:11:54.195 People have said this, I'm hearing it pretty consistently, when I talk 00:11:54.195 --> 00:11:57.675 to companies is that they're seeing more innovation 'cause things got 00:11:57.675 --> 00:11:58.725 put on pause for a little bit. 00:11:59.055 --> 00:12:02.715 Innovation can only be on pause for a very short while before 00:12:02.775 --> 00:12:04.185 it has really negative effects. 00:12:04.185 --> 00:12:05.290 So, um, because. 00:12:06.045 --> 00:12:09.735 You know, when I stop innovating this year, the effects aren't 00:12:09.735 --> 00:12:10.785 felt for a couple years. 00:12:10.785 --> 00:12:12.585 So we're in a bit of that. 00:12:12.585 --> 00:12:15.765 So I think what the positive news is that there's focus on 00:12:16.155 --> 00:12:17.505 innovation in the right places. 00:12:17.605 --> 00:12:20.725 , Whether it's building growth in adjacent markets, right? 00:12:20.725 --> 00:12:23.965 And if, and figuring out how to apply your business in your products, 00:12:23.965 --> 00:12:27.725 in those adjacent markets, that's becoming really critical as well 00:12:27.725 --> 00:12:29.075 as defending the core businesses. 00:12:29.075 --> 00:12:30.755 So that's, that's one lens. 00:12:31.265 --> 00:12:32.405 The second lens. 00:12:32.825 --> 00:12:36.655 Is around regionalization, , and really focusing in on supply chain. 00:12:36.925 --> 00:12:38.575 I'm gonna say it again. 00:12:39.445 --> 00:12:41.965 The 2020s have a decade of the supply chain. 00:12:42.535 --> 00:12:48.265 We did not talk about supply chain nearly this much in any of the rest of my career. 00:12:48.265 --> 00:12:49.195 I mean, it's been there, right? 00:12:49.195 --> 00:12:52.465 It's always been important, but it's really about supply chain, 00:12:52.465 --> 00:12:56.635 supply chain strategy, and I think a bit more regionalization. 00:12:56.635 --> 00:13:01.265 So I'm gonna bring out Clat, as an example because they've talked about 00:13:01.295 --> 00:13:04.385 how while they're a global company. 00:13:04.898 --> 00:13:09.248 Their business is actually less exposed to international, supply chains. 00:13:09.428 --> 00:13:15.308 Something like 70% of their supply chain, their, their raw materials are coming in. 00:13:15.308 --> 00:13:20.898 They're local, so they're regional, , whether it be Asia, north America, Europe. 00:13:20.898 --> 00:13:24.168 And so that provides some benefit from both. 00:13:24.238 --> 00:13:26.093 a timing basis of, I just think about the. 00:13:26.563 --> 00:13:30.583 Length of time it costs to move product globally, the cost of moving product 00:13:30.583 --> 00:13:34.693 globally, some of the challenges that you may have, so you're facing, and 00:13:34.693 --> 00:13:38.743 you define competition a little bit differently when you're focusing on 00:13:38.803 --> 00:13:41.863 local and regional markets versus when you're focusing on global markets. 00:13:41.953 --> 00:13:43.723 And so that has served them well. 00:13:44.353 --> 00:13:46.513 Westlake would be another one I don't often talk about. 00:13:46.513 --> 00:13:47.023 Westlake. 00:13:47.413 --> 00:13:49.963 Um, you know, they're very, uh, US-centric. 00:13:50.207 --> 00:13:50.537 and they're. 00:13:50.882 --> 00:13:52.112 Proud to be US centric. 00:13:52.192 --> 00:13:55.192 And that has served them well because they're in a market 00:13:55.192 --> 00:13:56.572 that has created resilience. 00:13:56.872 --> 00:14:00.742 And especially when you think about the global pressures that 00:14:00.982 --> 00:14:05.062 companies are facing, your company is facing, figuring out how to 00:14:05.062 --> 00:14:09.952 create the local infrastructure, some of the, trade barriers. 00:14:10.507 --> 00:14:14.047 You can create and you're not, you know, we're not talking about anti-competitive 00:14:14.317 --> 00:14:18.877 behaviors, but just thinking about what are the things that you are doing to 00:14:18.877 --> 00:14:21.037 carve out and protect your business. 00:14:21.067 --> 00:14:24.517 Some of this is a regional footprint, some of it's around the way that 00:14:24.517 --> 00:14:26.707 you structure your agreements. 00:14:26.967 --> 00:14:32.907 And of course the thing we learned in 2020 is around being really clear about what 00:14:32.907 --> 00:14:36.567 that supply chain is, who you're relying on, where your products are coming from. 00:14:36.798 --> 00:14:41.268 Not being sole sourced, although I hear people kind of going back to some of 00:14:41.268 --> 00:14:45.198 their old ways of, oh, I'm gonna focus in working with, you know, just one 00:14:45.198 --> 00:14:48.048 or two key suppliers or key partners. 00:14:48.395 --> 00:14:51.485 and that actually leaves you quite vulnerable, right? 00:14:51.545 --> 00:14:53.225 Um, when there's disruption. 00:14:53.225 --> 00:14:58.535 So I think thinking about supply chain from a resilient perspective, where 00:14:58.535 --> 00:15:02.225 your customers are located, where your suppliers and your business partners are 00:15:02.225 --> 00:15:04.505 located, um, becomes really critical. 00:15:05.185 --> 00:15:09.145 The third strategic theme that's really emerging from these insights, and again, 00:15:09.235 --> 00:15:13.435 I'm just gonna say it's a platform that we've been focusing on this year, 00:15:13.675 --> 00:15:15.595 is around cost discipline, right? 00:15:15.595 --> 00:15:21.565 So thinking about cost discipline as an asset. 00:15:22.120 --> 00:15:25.330 Not just an opportunity or a hindrance, right? 00:15:25.330 --> 00:15:28.120 And I think we sometimes say, oh, we're, it's the slash and burn. 00:15:28.360 --> 00:15:32.960 Nobody wants the slash and burn when it comes to cost discipline, it's really 00:15:32.960 --> 00:15:37.400 around the right prioritization of where you're spending money to invest. 00:15:37.400 --> 00:15:40.670 So digital is one space, although I'm gonna be really honest, I 00:15:40.705 --> 00:15:42.830 had a conversation last week where people were saying. 00:15:43.690 --> 00:15:46.990 Companies are a little bit sketch in terms of where they're 00:15:46.990 --> 00:15:48.370 seeing their digital investments. 00:15:48.760 --> 00:15:52.090 I think it's also this idea that, oh gee, one size fits all. 00:15:52.090 --> 00:15:53.380 We're gonna go in and go big. 00:15:53.770 --> 00:15:57.370 Rather than getting back to the whole idea of let's pilot, let's get 00:15:57.370 --> 00:16:01.540 resilient, let's be fit for purpose and where we make our investments. 00:16:01.540 --> 00:16:05.290 So I think where we are today in the companies that are being most successful. 00:16:05.602 --> 00:16:10.372 So far in 2025, and as we close out the year and head into 2026 00:16:10.762 --> 00:16:15.882 is around being very mindful of, where those investments are. 00:16:16.752 --> 00:16:21.072 I think we're gonna see a lot less of these big investments, whether 00:16:21.072 --> 00:16:23.472 they're in assets, whether they're in digital, whether they're in 00:16:23.472 --> 00:16:30.882 innovations, and a lot more nimble innovations, nimble investments that. 00:16:31.306 --> 00:16:36.256 Pay results more quickly that you can affect more quickly, get 00:16:36.256 --> 00:16:37.936 results more quickly, et cetera. 00:16:37.936 --> 00:16:42.976 So, and I think about this when with the leaders that are framing cost discipline. 00:16:43.459 --> 00:16:47.659 With investment discipline, um, and investment discipline. 00:16:47.659 --> 00:16:50.149 Not being don't spend, but spend the right way. 00:16:50.286 --> 00:16:52.116 And being creative in how you're doing that. 00:16:52.356 --> 00:16:54.966 Those are the winners and that's where we're gonna see, and it ties 00:16:54.966 --> 00:16:58.476 in with this idea of continuing to innovate because when you innovate 00:16:58.476 --> 00:17:00.126 today, it pays dividends tomorrow. 00:17:00.459 --> 00:17:02.679 making the right investments today, 'cause those investments 00:17:02.679 --> 00:17:04.449 today pay dividends tomorrow. 00:17:04.659 --> 00:17:09.009 So it is a bit of this long term view, but you have to execute here in 2025 00:17:09.279 --> 00:17:10.869 and going into 2026 the right way. 00:17:11.169 --> 00:17:14.319 the other piece we're seeing and kind of the theme and, and you know, 00:17:14.349 --> 00:17:17.829 again, this becomes a bit structural in your company, but this divergence 00:17:17.829 --> 00:17:22.509 between specialty and commodity it has gotten, More highlighted, right? 00:17:22.509 --> 00:17:26.109 So I think you would say perhaps that some of the specialty products 00:17:26.109 --> 00:17:30.219 or certain product lines that have been more resilient because they 00:17:30.589 --> 00:17:32.449 have more value built into it. 00:17:32.849 --> 00:17:36.179 They have tighter connections with their customers and creating 00:17:36.179 --> 00:17:37.619 customer centric solutions. 00:17:37.709 --> 00:17:39.264 And there are things that customers really need. 00:17:39.364 --> 00:17:42.269 And so I think this is where we're seeing some of this divergence. 00:17:42.676 --> 00:17:44.806 and, and frankly, it's harder to replicate. 00:17:45.516 --> 00:17:49.446 So, you know, I get back to this commodity specialty perspective. 00:17:49.806 --> 00:17:52.116 It's kind of easy to replicate polyethylene now. 00:17:52.146 --> 00:17:56.076 Okay folks, you polyethylene producers out there, don't hate on me. 00:17:56.436 --> 00:18:00.022 But there's been a lot of benefit and a lot of focus as companies start 00:18:00.022 --> 00:18:03.412 up, as they grow, as they think about what their product landscape is. 00:18:04.132 --> 00:18:06.892 I'm base loading, you know, this commodity product. 00:18:07.012 --> 00:18:07.372 Great. 00:18:07.372 --> 00:18:08.242 There's value there. 00:18:08.637 --> 00:18:13.287 But it's also easy for others to replicate specialties, harder to replicate. 00:18:13.287 --> 00:18:15.927 So, okay, so you don't have a specialty portfolio. 00:18:15.927 --> 00:18:16.557 What are you gonna do? 00:18:16.857 --> 00:18:22.921 Think about the things that are in your control that are difficult to replicate. 00:18:23.126 --> 00:18:26.366 Some of this may be about your approach to talent. 00:18:26.396 --> 00:18:28.736 This may be your customer centricity. 00:18:29.036 --> 00:18:30.596 How do you approach your customers? 00:18:30.806 --> 00:18:33.686 How do you create value with your business partners? 00:18:33.896 --> 00:18:34.226 Right? 00:18:34.226 --> 00:18:39.506 So I think there's a way of, of bringing in this specialty and 00:18:39.506 --> 00:18:44.846 diversification even when you'd say, ah, my co my, my products are vanilla. 00:18:44.846 --> 00:18:46.856 I, they're not very differentiated. 00:18:47.262 --> 00:18:49.992 Yet the way that you approach markets can be differentiated. 00:18:49.992 --> 00:18:54.222 So I think that's what we're seeing, um, as we, we focus in on that, particularly 00:18:54.222 --> 00:18:57.132 as you think about customer-centric solutions and things that are 00:18:57.132 --> 00:18:59.322 creating value for your value chain. 00:18:59.692 --> 00:19:01.432 And then investing through transformation. 00:19:01.432 --> 00:19:01.732 Right. 00:19:01.732 --> 00:19:03.964 So I think this piece is. 00:19:05.009 --> 00:19:09.689 While there is cost control, this whole idea of business transformation, 00:19:10.349 --> 00:19:15.089 business transformation, industry transformation takes long-term commitment. 00:19:15.389 --> 00:19:20.789 There is no doubt in my mind that we are at an inflection point in the industry. 00:19:21.509 --> 00:19:23.099 It may not be a momentary inflection point. 00:19:23.099 --> 00:19:26.459 It's an inflection point that's taken a couple years where our approach 00:19:26.459 --> 00:19:30.179 to business and how we're evolving is very different than where it was. 00:19:30.179 --> 00:19:32.279 So, um, when you look at. 00:19:32.594 --> 00:19:34.694 You know, some of the learnings that we can get from this 00:19:34.874 --> 00:19:36.734 second quarter earnings reports. 00:19:37.064 --> 00:19:37.724 It's around this. 00:19:38.292 --> 00:19:41.712 Cutting where it's appropriate, but continuing to invest, investing in 00:19:41.712 --> 00:19:45.292 talent, digitization, sustainable innovation, sustainability. 00:19:45.352 --> 00:19:50.032 You know, uh, we don't talk a lot about sustainability and, or I mean we do a 00:19:50.032 --> 00:19:54.112 little bit not, I sometimes characterize sustainability with the small s like I do. 00:19:54.112 --> 00:19:58.792 You have a sustainable business versus sustainability with the Big S is 00:19:58.792 --> 00:20:02.872 your bus, are you focusing on kind of this glory days of sustainability? 00:20:02.872 --> 00:20:07.012 Which when we think about where we were in 2020, it was kind of a hotspot, right? 00:20:07.012 --> 00:20:10.132 And now there's a focus on ESG investing. 00:20:10.132 --> 00:20:13.282 There was a focus on sustainable, sustainable development. 00:20:13.282 --> 00:20:15.262 There was a lot of tax incentives. 00:20:15.652 --> 00:20:20.119 Those are slowly filtering away, maybe quickly filtering away, 00:20:20.329 --> 00:20:21.409 depending on your point of view. 00:20:21.919 --> 00:20:22.699 And yet. 00:20:23.009 --> 00:20:24.899 We're continuing to invest. 00:20:24.899 --> 00:20:29.129 There continues to be a business case for sustainability and 00:20:29.129 --> 00:20:30.689 companies continue to focus there. 00:20:30.839 --> 00:20:34.649 They have to figure it out differently, figure it out perhaps without all the tax 00:20:34.649 --> 00:20:37.139 incentives that made it super appealing. 00:20:37.619 --> 00:20:40.379 Um, and so it's gonna be a slower study approach. 00:20:40.379 --> 00:20:43.249 Fact, one of the panels that's at the Chemical Summit this year is 00:20:43.249 --> 00:20:47.449 the business case for sustainability because there is still a stick case 00:20:47.449 --> 00:20:53.269 for sustainability, whether it has lost its shine and luster and just 00:20:53.269 --> 00:20:57.619 the super excitement, we're now in the hard work of it, , and getting real. 00:20:57.799 --> 00:21:01.309 And, and that's part of the evolution of how the industry has evolved. 00:21:01.309 --> 00:21:04.909 So, Those are the kind of the five themes that are going through this, right? 00:21:04.909 --> 00:21:05.839 So think lessons. 00:21:05.839 --> 00:21:08.509 When we think about lessons for you guys, what's your takeaway? 00:21:08.689 --> 00:21:11.149 Number one, balancing today versus tomorrow, right? 00:21:11.149 --> 00:21:16.099 So doing the right things in your business today that allow you to reinvest. 00:21:16.369 --> 00:21:19.219 Grow focus on, on future business. 00:21:19.279 --> 00:21:23.119 Second piece is this whole aspect of designing resilient supply chains. 00:21:23.509 --> 00:21:26.089 I know that you think you've already done the work, right? 00:21:26.269 --> 00:21:26.869 So here's this. 00:21:26.869 --> 00:21:29.839 You're like, Victoria, we have done this work already. 00:21:30.109 --> 00:21:30.799 Yes, you have. 00:21:31.444 --> 00:21:34.804 And you're gonna have to do it again, and you're gonna have to do it again because 00:21:34.804 --> 00:21:37.504 situations keep evolving and changing. 00:21:37.864 --> 00:21:41.284 Um, and 2020 is the decade of the supply chain for a reason. 00:21:41.644 --> 00:21:46.984 You need to continue investing and focusing and refining and creating 00:21:46.984 --> 00:21:48.574 those resilient supply chains. 00:21:48.574 --> 00:21:52.534 And the whole aspect of resilient is it's not one and done, it's ongoing. 00:21:52.534 --> 00:21:54.524 So, I think that's really critical. 00:21:54.764 --> 00:21:57.014 The third piece is really the focus on talent. 00:21:57.014 --> 00:21:57.339 So we didn't. 00:21:57.804 --> 00:22:02.274 Talk a lot about this, and yet talent kind of definitely weaves through, right? 00:22:02.274 --> 00:22:04.554 Because the companies aren't, are not delivering these 00:22:04.554 --> 00:22:05.934 results without their people. 00:22:06.264 --> 00:22:09.834 We're in an evolutionary point of view when it comes to talent 00:22:09.834 --> 00:22:11.244 across the industry, right? 00:22:11.244 --> 00:22:12.414 And we're seeing. 00:22:13.004 --> 00:22:14.504 People playing off, right? 00:22:14.504 --> 00:22:17.564 And, and I referenced CB Chem earlier, there's others that are cutting 00:22:17.564 --> 00:22:21.194 staff, and yet you still have to continue to have the right talent 00:22:21.194 --> 00:22:22.664 and grow talent and bring talent in. 00:22:22.964 --> 00:22:28.334 So I think, um, this complexity that comes through is, is really critical. 00:22:28.574 --> 00:22:33.944 Um, and you know, I'm just gonna say at the end of the day, a lot of this, 00:22:34.164 --> 00:22:35.904 , falls into communications, right? 00:22:35.904 --> 00:22:39.774 Tell your story, communicate clearly inside your company. 00:22:40.269 --> 00:22:43.749 Outside your company with your employees, with your other stakeholders. 00:22:44.199 --> 00:22:48.189 Um, because as we're going through these changes, and I've seen this and I'm 00:22:48.189 --> 00:22:52.612 sure you've seen this as well, people sometimes are living on yesterday's 00:22:52.612 --> 00:22:55.642 assumptions, and yet today it's changed. 00:22:55.672 --> 00:22:59.392 So getting crystal clear on how you're navigating what your 00:22:59.392 --> 00:23:04.162 direction is, communicating that clearly to your stakeholders 00:23:04.342 --> 00:23:07.867 inside your company and outside of your company is really critical. 00:23:08.227 --> 00:23:12.757 That's my quick summary, um, of kind of what we can take away 00:23:12.787 --> 00:23:14.887 from midyear earnings reports. 00:23:15.230 --> 00:23:17.120 focusing it on 26. 00:23:17.330 --> 00:23:21.800 But don't forget 2025, I actually look at this and I say, we have five months left. 00:23:21.800 --> 00:23:27.350 There's a lot of amazing things, amazing business that can happen this year. 00:23:27.800 --> 00:23:30.440 If you're ready, if you're primed, are you, if you're 00:23:30.440 --> 00:23:31.520 ready to take advantage of that. 00:23:31.520 --> 00:23:35.540 And when I talk to companies, they're like, um, winning business because 00:23:35.540 --> 00:23:39.290 they're ready and they're losing business because they're not ready. 00:23:39.735 --> 00:23:45.225 Getting your whole system, your people, your teams aligned to be ready 00:23:45.225 --> 00:23:49.125 to take available of opportunities is more critical than ever. 00:23:49.335 --> 00:23:51.465 So, um, that's it for today. 00:23:51.525 --> 00:23:55.215 Um, I talked about this earlier in, in this podcast episode. 00:23:55.215 --> 00:23:56.385 I'm gonna wrap it up as hell. 00:23:56.745 --> 00:23:59.325 Love to see you guys at The Chemical Summit in 25. 00:23:59.655 --> 00:24:03.435 Um, it's at September 30th and October 1st in Houston, Texas. 00:24:03.800 --> 00:24:08.000 You are going to hear from a number of great guests that have been 00:24:08.300 --> 00:24:12.400 featured on the Chemical Show, as well as people across the chemical 00:24:12.400 --> 00:24:18.030 community in the audience, engaging, growing, focusing on business, and 00:24:18.030 --> 00:24:23.700 strategic Strat focusing on business and strategic insights and boosting 00:24:23.790 --> 00:24:25.920 your business opportunities for 2026. 00:24:26.280 --> 00:24:28.170 Be there and thank you for listening today. 00:24:28.170 --> 00:24:30.615 Keep following, keep sharing and we'll talk to you soon.