Specialty Chemicals · Nutraceutical & Functional Ingredients · Personal-Care Chemistry
Hold specialty margins through the downcycle, then grow out of it.
Specialty chemical and ingredient businesses are working through a long industry downcycle with little help from volume. Margin now depends on how much of your price you realize, how quickly you quote and ship, how often technical service turns a sample into specified business, and how well your plan balances inventory and service. Ometz works with leadership teams and sponsors to improve those results against your own baseline, redesigning the commercial and planning work and building the data, automation and AI behind it.
Health & Wellness · Value Chain
The landscape
In a long downcycle, margin comes from price, service and cost-to-serve.
The chemical industry has entered a prolonged downcycle: Deloitte forecasts global production growth of 2% for 2026 and a slight contraction in US volumes, with overcapacity in basic chemicals weighing on operating rates. For mid-market specialty producers and ingredient suppliers, waiting for volume is not a plan. The levers that remain are commercial and operational: realizing the price your products are worth, serving customers at a cost you understand, and planning so that inventory supports service instead of substituting for it.
Pricing is the largest of them. Across more than a thousand pricing-excellence programs in McKinsey's data, return on sales typically rose 2–7 percentage points, depending on the sector. Customers expect faster quotes, complete documentation packages and digital ordering, which puts quote-to-cash on the same agenda as price. In specialty and functional ingredients, technical service is what wins a specification, and it is usually the most stretched team in the business. Plants face the same squeeze as the rest of manufacturing, with as many as 1.9M US manufacturing jobs at risk of going unfilled through 2033 (Deloitte and The Manufacturing Institute).
Portfolio change adds a third front. Corporate carve-outs and buy-and-build platforms are common routes into specialty chemicals and ingredients, and one-time separation costs typically run 1–5% of the divested business's revenue (BCG). Demand for nutraceutical and functional ingredients rests on durable consumer habits, with 75% of US adults using dietary supplements (CRN), yet the commercial and planning processes behind that demand were often built for a different scale or a former parent. We work on all three fronts with the same method: diagnose against your own data, redesign the work, and build the data, automation and AI it needs.
The market problem, in published numbers
2%
forecast global chemical production growth for 2026, with US volumes expected to contract 0.2%, as the industry's prolonged downcycle continues
2–7
percentage points of return on sales typically added by pricing-excellence and performance-improvement initiatives, across more than 1,000 programs, depending on the sector
McKinsey Quarterly, Turning pricing power into profit (2015)
20–50%
potential reduction in forecasting errors from applying AI-driven forecasting to supply chain management
1–5%
of a divested business's revenue typically consumed by one-time separation costs, reaching up to 13% in large, complex carve-outs (more than 50 divestitures analyzed)
BCG, Beware of Separation Costs That Compromise Value Creation (2021)
75%
of US adults use dietary supplements, a rate in line with the prior year
7%
of organizations have fully scaled AI across the business
McKinsey, The State of AI (November 2025 global survey) (2025)
1.9M
US manufacturing jobs that could go unfilled through 2033 if skills and applicant gaps are not addressed, out of a net need of as many as 3.8 million
Figures are third-party market benchmarks from the cited sources, not Ometz Partners client results. We share them so you can size the problem before we ever talk.
Where performance is lost
Price that leaks before it reaches the P&L
Discounts, freight terms, rebates, payment terms and unrecovered raw-material or energy costs erode the price your team negotiated. Few businesses see the full waterfall by customer and product.
Quote-to-cash that slows customers and cash
Quotes, sample requests, documentation and order entry move through inboxes and spreadsheets. Customers wait, sellers become order administrators, and disputes push out collections.
Technical service stretched thin
Application and technical teams spend their days on routine questions and paperwork instead of the projects that get your product specified into a customer's formulation.
Plans that trade service against working capital
Campaign scheduling, long raw-material lead times and lumpy demand leave too much inventory on some grades and shortages on the ones key accounts need.
The Chemicals & Ingredients program
Programs built around how your business runs.
REVENUE
Price Realization and Specification Growth
Capture the price your products are worth, close the leakage between list and pocket, and turn technical service into specified, repeatable business.
What we measure
- Price realization versus target
- Pocket margin by customer and product
- Sample-to-specification conversion
01
Price waterfall and leakage recovery
Pocket price by customer and product, built from invoice-level data, with leakage closed through terms, policy and deal-desk discipline that sellers can apply in the moment.
02
Value-based and index-linked pricing
Specialties priced on the value delivered and the customer's real alternatives; grades exposed to raw-material and energy swings priced through transparent index or surcharge mechanisms.
03
Technical service triage and specification pipeline
Routine technical, regulatory and documentation questions answered from a governed knowledge base with expert review, so application specialists spend their time on projects that win specifications.
MARGIN
Quote-to-Cash and S&OP Performance
Faster quotes, cleaner orders and a plan that holds service and working capital together, at a cost-to-serve you can see by customer.
What we measure
- Quote turnaround and quote-to-order conversion
- Forecast accuracy and service level
- Days sales outstanding and inventory days
01
Quote and order automation
Quotes priced within guardrails and returned the same day where policy allows, and customer orders and document requests captured from email and portals into the ERP, with exceptions routed to a person.
02
Integrated S&OP
A monthly cycle linking demand, campaign scheduling and raw-material supply, with AI-driven forecasts as the starting point and inventory targets set by grade and customer commitment.
03
Cost-to-serve and dispute reduction
Cost-to-serve by customer, order profile and product, with disputes traced to their root cause in pricing, delivery or documentation so they stop recurring.
VALUE CAPTURE
Carve-Out Separation and Standalone Performance
Exit transition services on schedule, stand up the functions a standalone business needs, and remove the stranded and duplicated cost a separation leaves behind.
What we measure
- Transition services exit dates met
- Separation cost versus plan
- Standalone SG&A as a share of revenue
01
Transition services exit and standalone readiness
A function-by-function exit plan for finance, procurement, IT, customer service and supply, with readiness tracked weekly against the transition services calendar.
02
Commercial continuity
Customer contracts, pricing, documentation and regulatory registrations transferred without service interruption, with key accounts managed directly through the change.
03
Standalone operating model and cost
Processes and automation designed for the standalone scale, and stranded or duplicated cost removed against a baseline the sponsor can audit. The same method applies when integrating add-on acquisitions into a platform.
The diagnosis
What we look for in your portfolio.
A Performance Diagnostic measures these in your own systems first, so every later result is judged against the same baseline.
The price waterfall from list to pocket by customer and product, including freight, rebates, terms and unrecovered surcharges
Realization on the last price increase: what was announced, what was achieved, and which accounts were exempted and why
Quote turnaround, quote-to-order conversion, and the share of orders that need manual entry or correction
Technical service and sample requests by type and cycle time, and how many convert into specified business
Forecast error, inventory by grade and location, and service level against customer commitments
For carve-outs: transition services scope and exit dates, stranded costs, and the standalone functions still missing
How an engagement runs
01
Weeks 1 to 4: Performance Diagnostic
Fixed fee, 2 to 4 weeks. We baseline price realization, quote-to-cash, technical service and planning from your ERP, CRM and order data, then price three improvement plays and set a 90-day plan your leadership team and sponsor can hold us to.
02
First 90 days: The lead play in production
Most often price realization on the accounts and products where leakage is largest, or a carve-out workstream tied to the transition services calendar. Redesigned processes run on live deals and live orders from the first weeks, with the tools built around them.
03
Month 4 onward: Scale, measure, hand over
Further plays extend across business units and sites, each reported against the diagnostic baseline. Your teams own the process and the tools; we stay as long as the results justify it, including interim leadership where a role is open.
Chemicals & Ingredients FAQ
No. Specialties are priced on value and the customer's alternatives; near-commodity grades are priced on index or cost-plus mechanisms with clear pass-through. The diagnostic separates the portfolio so each part gets the right pricing model and the right governance.
We build the workflows that find, assemble and send documents such as safety data sheets, certificates of analysis and regulatory statements, and the knowledge base technical teams draw on. Your regulatory and product-stewardship owners remain the authors and approvers. We do not provide regulatory sign-off or claim certifications we do not hold.
With the transition services calendar and the value-creation plan. The diagnostic baselines standalone cost, commercial performance and readiness by function, then prices the plays that matter most before the first services exit.
As a tool inside work your people already do: pricing analysis, quote preparation, order capture from email, technical question triage and forecasting. Most organizations now use AI somewhere, yet only 7% have fully scaled it (McKinsey). Scale comes from redesigning the process first and measuring the result against your own baseline.
Yes. The levers are similar, with more weight on documentation, customer audits, support for brand customers' claims files, and specification management. We support your quality and regulatory teams with workflows and data; they keep ownership of every regulated decision.
Next step
Start with a Performance Diagnostic.
The Performance Diagnostic runs for two to four weeks at a fixed fee and ends with a baseline, three priced improvement plays and a 90-day plan. The findings are yours whether or not we continue.