Chemical Industry Executives Share Insights on Innovation as a Core Business Strategy.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Dec. 17, 1998--

Chemical Industry Innovation Forum sponsored by Arthur D. Little, Inc. highlights the challenges and benefits of innovation to drive ROI

and sustainable top-line growth.

Leading-edge chemical companies striving to develop and implement effective ROI and growth strategies face a variety of challenges. However, those companies who transition beyond reengineering to incorporate product, process and business innovation strategies will realize higher returns and top-line growth, according to a Chemical Industry Innovation Forum sponsored by Arthur D. Little, Inc. (ADL), a global strategic consulting firm.

The forum's theme was "Blasting the 20/15 Barrier-Achieving ROCE and Growth Targets Over The Cycle." Senior executives from ten global chemical corporations participated in the forum held December 9 and 10 in New York City. Together they explored the key challenges facing the chemical industry in its attempt to achieve targets as high as 20 percent Return On Capital Employed (ROCE) and 15 percent growth. Jack Krol, Chairman of DuPont kicked off the event, sharing his hard-won knowledge and lessons learned in transforming DuPont through driving innovation across the enterprise.

Participants in the ADL Forum included top-ranking executives from Borden Chemical, Great Lakes, J.M. Huber, OxyChem, Reichhold, Rohm and Haas, NOVA Chemicals, Solutia, Sunoco Chemicals, and DuPont. Senior members of ADL's Chemical Consulting Group also participated.

According to Robert Henske, Senior Vice President, Arthur D. Little, Inc., "The chemical industry is at a crossroads with chemical companies under a great deal of strain to balance short-term profitability with long-term growth. Many companies are finding it difficult to transition beyond reengineering to product, process and business innovation, but clearly those companies who can develop innovative strategies and drive them across their organization will win today's battle for profitability and tomorrow's for growth."

The participants agreed that the chemical industry usually sees innovation as new products. Yet, in order to create and sustain higher returns and growth, that thinking needs to shift to acknowledge that innovation is everything -- new products, new processes, new services, and new ways of serving customers. "Embracing innovation across the board is the key to breaking out of the cycle of cost cutting and reengineering." said Jack Krol, Chairman of DuPont.

Forum participants' discussions included the following steps towards making innovation a key business driver:

-- Streamline the organizational structure for greater speed through

removing or reducing hierarchical levels. Apply selective

outsourcing to facilitate this process, i.e.: where value is not

added, outsource.

-- Improve overall competitiveness by improving capital efficiency,

through tight supply chain management and maximize use of assets.

-- Develop a market focus. Creating market-focused and

customer-centric business units as opposed to dedicated product

units will generate more value.

-- Form strategic alliances that add value for your company and your

customers. Such partnerships can open doors to new markets and

help in the development of new products through the combined use

of resources.

-- Shift expectations through on going change management. The

cultural issues of change management can pose major obstacles to

enterprise-wide innovation.

The forum highlights and participants' insights from the Chemical Industry Innovation Forum; Blasting The 20/15 barrier - Achieving ROCE and Growth Over The Cycle are being published in a booklet by ADL available in February/March 1999. To receive a copy, contact a communications manager at E-mail: [e-mail].

Arthur D. Little is one of the world's premier consulting firms. Through its spectrum of innovation -- its integrated expertise in strategy formation, process improvement, change management, and technology and product development -- it helps leading organizations establish a sustainable innovation premium, creating strong financial performance and accelerated growth. Founded in 1886, Arthur D. Little is distinguished from its competitors by the caliber of its people and the breadth and depth of its experience. It is unique in its commitment to helping its clients reinvent their organizations, enhance their capacity for learning and change, and create lasting value. For more information regarding Arthur D. Little, visit the company's Internet site at www.arthurdlittle.com.