PORTLAND, OR — According to a new study by Allied Market Research, the market for specialty chemicals is expected to grow into a $233.5 billion industry by 2020. The specialty chemicals industry operates within a targeted space that is filled with new opportunities as well as challenges. Manufacturing chemicals that meet clients’ demand and perform different tasks are not good enough in today’s world. To maintain a foothold in the chemical industry, producers must be ahead of the curve and keep up with the ever-changing industry demands, especially when the chemical industry has become so sensitive to global forces such Brexit and a strong dollar.
What Are Specialty Chemicals?
Also known as specialties or effect chemicals, specialty chemicals are particular products that offer a wide variety of effects on which several industries are solely dependent. These materials are used based on their performance and functions. The physical and chemical characteristics of single molecules or composition of the mixtures of the effect chemicals define the performance of the end product. Specialty chemicals find applications in various end-user industries across the globe, including construction chemicals. An increased focus on R&D in specialty chemicals and a rise in commercialization and industrialization have boosted the growth of the global specialty chemicals industry. Additionally, development of eco-friendly specialty chemicals has further supplemented market growth. Going green is the biggest trend in the industry. Around two-thirds of specialty chemical manufacturers are currently implementing sustainable initiatives, which include bio-alternatives and use of energy-efficient separation methods such as crystallization.
Trend of Bio-Based Specialty Chemicals
Today, the demand for bio-based chemicals is increasing, and bio-based chemical manufacturers are going toe-to-toe with their fossil-based predecessors. Recently, a new biotech initiative was proposed to convert waste gas into specialty chemicals. Non-profit Genome British Columbia and Phytonix Corp. announced a partnership aimed at developing a manufacturing platform where CO2 emissions from industrial facilities would be converted into specialty chemicals to be used in fragrance industry. The project is called CleanBC, which is a plan of British Columbia to reduce pollution and develop a low-carbon economy. Phytonix Corp. is an industrial biotechnology company that uses industrial-scale biotech to make sustainable chemicals.
Expansion and New Companies
Evonik Industries, the global leader in manufacturing specialty chemicals, recently expanded its capacity for developing high-purity C13 alcohol gisotridecanol (ITDA). This will enable it to strengthen its position in the market and grow its customer base. Hinnerk G. Becker, the Market Segment Manager at Evonik Performance Intermediates, said, “ITDA is a prime petrochemical specialty, and with this quality – which contains nearly 100% C13 alcohols – we could provide our customers a high-quality product.”
Apart from this, Indian specialty companies are expected to invest in capacity expansion in the coming years, driven by increasing demand from domestic and overseas market. According to data compiled by SBICAP Securities, companies such as Aarti Industries, Himandri Specialty Chemicals, Bodal Chemicals and Fine Organic Industries have gathered more than Rs. 9,200 crores for FY20 and have proposed capital expenditure of around Rs. 5,000 crores and 6,500 crores for FY20 and FY21 respectively. In addition, Indian specialty companies have witnessed a sudden growth in demand for their products over the last few years.
Major specialty companies have focused their investments in developing a specific product line, owing to the growing demand for specialty chemicals and an increased competition from low-cost suppliers in the market. Prior to this, specialty chemical providers used to invest more in specialized products to increased demand for their other product lines that were similar in function. In this way, companies could manufacture and market their multiple products simultaneously while increasing sales and profit. However, the time has changed and competition from low-cost suppliers has increased. These suppliers provide specialty chemicals with increased efficiency, making major companies rethink their marketing strategies to beat low-cost suppliers. For the majority of the specialty chemicals, performance, quality and efficiency of the product and production process have become the vital components to increase revenue.
Apart from this, companies are now more open to adopting new technologies and innovative models to get better access to novel technological improvements. Specialty chemical companies used to believe that all they needed was to improve their technologies in-house to maintain their position in the market. However, many have realized that leveraging new technologies from the new entrants in the market could help lower production costs and deploy more effective production procedures.
With the constant need to improve the performance and function of specialty chemicals and increased investment in R&D, the global specialty chemical market is bound to increase. Moreover, changing lifestyle of consumer and demand for eco-friendly chemicals is expected to create new opportunities in the future.
For more information, visit https://www.alliedmarketresearch.com/specialty-chemicals-market.