Energy & Natural Resources (ENR)


Deals Activity: Very Low

Restructuring Activity: High

Input price volatility and energy costs present challenges, especially for independent operators.

Deals activity in Chemicals

  1. 1. Low deal volumes exaggerate volatility of deal flow in the sector.
  2. 2. Deal volumes have fallen in recent quarters.
  3. 3. We anticipate deal volumes will remain relatively low in in the sector over the short term.

Restructuring activity in Chemicals

The Chemicals industry has seen rising levels of restructuring activity over the course of 2022.

The spike in energy costs resulting from the Russian invasion of Ukraine has led to production costs increasing materially. This is squeezing already tight margins in an industry suffering from structural overcapacity.

An ongoing pressure to decarbonise is likely to feature in corporate strategy in 2023, with further regulation and investor pressure.


The chemicals sector continues to suffer from structural overcapacity, leading to sustained margin pressure and declining return on capital in recent years. In addition, volatile input cost inflation makes managing pricing unusually difficult. This is particularly relevant for independent manufacturers less closely associated with the wider petrochemicals sector.

In this environment, operators need to continue identifying cost reductions, non-core disposal options and strategic opportunities to remain competitive and generate acceptable returns, particularly as compliance and regulatory costs increase under the duplication of REACH regulations across the UK and EU post-Brexit.

Digitisation initiatives are being implemented to get the sector up to speed with the latest technology. The Made Smarter Adoption Programme in the North West of England (a £10bn market) is a great example of a project helping to reduce operational inefficiencies.

Environmental controls, in Europe and across the world, will continue to be a strategic and operational priority for responsible operators.

Find Your Expert

James Fagan is Interpath Lead for ENR, which includes Chemicals as one of four core segments. Matthew Courtman-Stock leads Interpath's approach to the Chemicals sector nationally. For a full list of our senior people with experience in this sector use the button below.

Our senior team