Kendall Justiniano on Surviving the Chemical Down Cycle

This episode Material Growth, features a discussion by our Founder, Kendall Justiniano, on The Chemical Show with Victoria Meyer, and offers a compelling look into the current state and future trajectory of the chemical industry, particularly focusing on the evolving landscape of sustainability and innovation amidst significant global shifts. Chemical Show host Victoria Meyer invites Kendall to delve into what he and other industry executives are observing and grappling with.

Topics discussed include:

* The length and root causes of the current global downturn

* Why the Old Playbook for chemical leaders is no longer enough.

* Re-assessing Sustainability to survive economic headwinds.

* China’s role in the current downturn.

* The decline of Commercial Excellence in Industrial B2B

Kendall Justiniano is the founder and managing director of Growth Arc Advisors. With a career spanning over 30 years at leading companies including Dow and WR Grace, he brings extensive experience in the chemical and material industries. Kendall has worked across sales, marketing, and product management, navigating diverse industry sectors—from specialty to commodity, high-growth to turnaround situations and divestments.

His unique strength lies in his "Fundamentals Analysis" approach, allowing him to "read the tea leaves" and identify significant opportunities, such as his early championship of composites at Polyone/Avient, which now accounts for a substantial portion of Avient's revenue. This comprehensive perspective is central to Growth Arc Advisors' mission: helping chemical leaders find growth opportunities in an increasingly challenging environment.

Victoria and Kendall discuss the current industry environment, one of the longest down cycles the industry has ever seen. This shift is primarily attributed to the end of a two-decade-long growth era fueled by China, whose real estate sector has imploded and materials sector is now significantly overbuilt. This has left the global market with substantial excess capacity, leading to grim commodity prices and challenging the conventional "down cycle playbook". Many of today’s current leaders may not have experienced or managed through such prolonged downturns, making the strategic challenges even more acute.

The episode also critically examines the transformation of the sustainability imperative. What began as an optimistic "rah-rah" movement with ambitious Net Zero goals has now confronted the harsh realities of profitability and implementation. Companies are engaged in a significant "pruning" or rationalization of sustainability investments, weighing trade-offs and questioning if financial returns truly go hand-in-hand with these initiatives.

For executives looking to manage and grow in this challenging environment, the episode underscores the critical need for reassessment based on fundamental business principles, especially in cost-constrained and capital-constrained scenarios. It also emphasizes that the "easy options" for growth, such as growth by acquisition, may no longer be viable. Instead, investing in core capabilities for organic growth and rediscovering muscle for new business, market-driven innovation, and advanced commercial excellence is paramount.

Show Notes

* The Chemical Show Podcast and a transcript of this Episode

* Victoria Meyer<