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Specialty Chemicals Market Overview
The global specialty chemicals market is expected to attain a size of $582.3 billion in 2017 and is forecasted to reach $782.2 billion by 2023, registering a CAGR of 5.1% during 2018–2023. The major factors driving the market growth are increasing demand of these chemicals in emerging economies, ongoing technological advancements in the market of these chemicals, and increasing penetration of end use industries.
GLOBAL SPECIALTY CHEMICALS MARKET, BY TYPE, $B (2013–2023)
Specialty chemicals are also known as performance chemicals. They are used as ingredients in the manufacturing processes of consumer and industrial goods. These are low volume chemical products, which add significant value to different products. These chemicals can be used for producing a variety of products, including detergents, paints, electronics, and petroleum products.
Based on type, the specialty chemicals market is categorized into agrochemicals, construction chemicals, specialty coatings, surfactants, food additives, polymer additives, electronic chemicals, cleaning chemicals, plastic additives, paper and textile chemicals, adhesives and sealants, lubricant and oilfield chemicals, and others. ‘Others’ include advanced ceramic materials, rubber processing chemicals, water treatment chemicals, and mining chemicals.
Of these, agrochemicals have been holding the largest share in the global market, with a contribution of more than 14.0% in 2017. This is attributed to the growing demand for crop protection chemicals, increasing adoption of new technologies and chemicals that increase crop production, and rising demand for diversified food items.
During the forecast period, the specialty chemicals market will witness the highest growth in lubricants and oilfield chemicals, with a CAGR of 7.0%. This is attributed to the rising usage of these chemicals in oilfields of major oil producing countries such as the U.S., Russia, Venezuela and Brazil, are expected to boost the demand for these chemicals.
Globally, APAC has been accounting for the highest revenue in the specialty chemicals market, with a contribution of more than 40.0% in 2017. This is attributed to the growing demand of chemicals for the crop protection, adoption of new technologies, increasing adoption of new chemicals to increase crop production, and growing demand of various food items. The increasing demand for public, residential, and commercial buildings combined with growing urban population is accelerating the growth of construction chemicals in the region.
Specialty Chemicals Market Dynamics
Shifting of chemical production base of many companies to APAC is the major trend witnessed in the global specialty chemicals market.
The major trend witnessed in the global specialty chemicals market is the shifting of production base to APAC. Driven by strong economic growth and market opportunities, the focus of chemical companies is shifting towards APAC. Due to the stringent environment norms in other regions, particularly Europe and North America, various companies are shifting their manufacturing bases to APAC. Along with that, expensive labor cost and reducing profit margins are compelling the manufacturers operating in the European and North American market, to shift their production base to APAC, which is comparatively a low-cost location.
Several global players are investing in setting up their own sites to increase their presence in the emerging market. For example, in 2016, Akzo Nobel N.V. opened a new specialty chemical plant in China. The company has invested more than $442.7 million. Hence, considering all these factors, it can be stated that APAC is all set to change the global landscape of the specialty chemicals market in near future.
The major factors driving the market growth are increasing demand of these chemicals in emerging economies, technological advancements in the market of these chemicals, and increasing penetration of end use industries.
Driven by the rapidly growing population and increasing consumer spending, the specialty chemicals market in emerging economies is expected to witness a good growth in the coming years. The growing middle-class population in these economies and rising industrialization in the fields of food, agriculture, cosmetics, and many other manufacturing sectors, are creating the demand of these chemicals in emerging economies. Countries such as China, India, and Brazil especially, are witnessing increased demand of specialty chemicals.
For instance, in 2014, India launched ‘Make in India’ initiative, that has enhanced the competitiveness of the chemicals sector in the country, by permitting 100% foreign direct investment (FDI) and de-licensing the manufacturing of most chemicals. All these factors are driving the growth of the specialty chemicals market in emerging economies.
The major restraints identified in the global specialty chemicals market are the changing regulations related to the chemical industry and fluctuating cost of raw materials.
The major factor restraining the growth of the specialty chemicals market is the changing chemical regulations. Chemical regulations are dynamic and are constantly changing as per the compliance requirements. Most of the countries have their own sets of regulations and requirements, which makes it difficult for international companies to comply with them. For example, in Europe, if manufacturers import one tonne or more per year of a chemical substance in the European Economic Area (European Union + Iceland, Liechtenstein and Norway), they have to record this in the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) database. These complex statutory requirements discourage the players from entering different regional-level markets.
Specialty Chemicals Market Competitive Landscape
Some of the major players operating in the global specialty chemicals market are Ashland Global Holdings Inc., DowDuPont Inc., Evonik Industries AG, Akzo Nobel N.V., Eastman Chemical Company, LOTTE Fine Chemical, Mitsui Chemicals Inc., Mitsubishi Chemical Corporation, BASF SE, Clariant AG, Huntsman Corporation, China Petroleum & Chemical Corporation, Saudi Basic Industries Corporation, Sadara Chemical Company, Saudi Speciality Industries Co Ltd., Thebe Unico, and AECI Ltd.