Back to How we help clients

Chemicals

Overview

Capital projects are an essential means of growth for chemical companies. Despite this, delivery of capital projects often falls short, with frequent delays and cost overruns. From large-scale projects to the portfolios of thousands of small and midsize sustaining or growth projects that chemicals companies typically execute each year, McKinsey teams bring unparalleled experience in delivering capital projects on time and budget. We work alongside our clients to help effectively manage their capital projects and portfolios throughout the entire life cycle, from setting an initial capital strategy, through portfolio planning and design, to execution.

Examples of our impact

  • We helped a leading agriculture and food company reduce its annual capital expenditure by 20 percent by installing a new capital-management system. Our approach included building new stage-gate processes tailored to project size and type, installing a project challenge team to optimize design, and building a cross-business portfolio-management approach.
  • We helped implement a lean construction approach for a leading Asian cement player to maximize the value of two plants that were 3 to 6 months from commissioning when McKinsey was engaged. We reduced the commissioning time by a full month and decreased the ramp-up from an expected 12 to 14 weeks to only 2 to 3 weeks. Additionally, the company saw an increase of $10 million to $14 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) per plant.
  • We decreased the construction time of a brownfield chemical plant by 25 percent, through improved project management, better performance monitoring, and the implementation of lean construction techniques.
  • We helped a leading chemical company transform its approach to its capital portfolio and small to midsize capital expenditure. We worked side by side with the client to customize and embed rapid design-optimization tools to identify solutions that met both technical and economic needs and to align project business cases and designs with the company’s most critical growth needs.
  • We supported a global petrochemicals company with contractor negotiations and work-flow management for a new multibillion-dollar chemical plant in North America. McKinsey provided independent labor and productivity benchmarks to support cost estimates and renegotiations with the contractors and also reviewed work-flow-management tools and processes. As a result, the client used metrics prioritized based on impact on project costs to negotiate with the contractor and saved up to $15 million.

Featured Experts

Matt Banholzer

Partner, Chicago

Ashish Chandarana

Partner, London

Koen Vermeltfoort

Partner, Amsterdam

Featured Insights

Article

Small equals big: Unlocking savings in small to midsize capital-project portfolios in chemicals

– Increased rigor in managing smaller chemical projects can help capture significant untapped value.