Over the last few years, the global specialty chemicals market has experienced inferior profitability rates within a more competitive environment. With the rising standards of living in many developing countries and swift growth of new technologically advanced financial prudence, the center of gravity of the global chemical industry is shifting. Moreover, as traditional companies are facing increasing pressure from local players and rival producers trying to seize a larger share of the global specialty chemicals market, new market entrants across the globe must find new ways to compete and grow. Additionally, specialty companies are dealing with an ever-increasing array of decisions and in many occasions are attempting to apply methods, processes, and tools that were developed in the era of lesser complexity. Furthermore, the inability to cope with the current complexity is resulting in higher costs, more unforeseen consequences, and lost opportunities for specialty chemicals companies.
- The client: A specialty chemicals market player
- Size: >$9 billion in revenue
- Area of Engagement: Market size forecast
The client – is an American chemical, biotechnology, and life science company. The company is headquartered in St. Louis, United States and has operations in over 40 countries. The specialty chemicals producer wanted to understand the market opportunity for marine outboard motor fuel additives in five countries. A market size forecast was needed as part of that strategic assessment. Lack of available data on the specialty chemicals product being investigated was the primary challenge. Additionally, incompatibility between the statistics available and a segmentation that would be meaningful to the specialty chemicals producer also created challenges in terms of how to adapt and utilize the available public domain data.
How Can Market Size Forecasting Help Specialty Chemicals Companies?
Market size forecasting is a key component of any strategic marketing planning. Knowledge of the size of the target market allows businesses to fully assess opportunities and accurately plan their approach and investments – wisely. Market size forecasting also helps specialty chemicals companies find new market niches, operate more efficiently, add values to their data, and minimize risks across geographies.
Summary of our market size analysis solution
The market size forecast experts at Infiniti Research compiled information across a wide array of exclusive sources to help the specialty chemicals producer understand the market opportunity for marine outboard motor fuel additives. The experts also followed a comprehensive research method, which delivered valuable insights on technological advancements, geographical target regions, market requirements, and future enhancement possibilities
The Solution Benefits and the Business Impact
With the help of Infiniti’s market size forecasting engagement, the specialty chemicals company gained insights into the statistics available from relevant boating, marina and shipping associations. This allowed the them to cross-check and verify the total number of registered boats and establish base numbers for outboard motors. Additionally, vital assumptions and ratios relating to how additives are used in different types and sizes of the outboard motor, as well as the typical usage of different types and sizes of the boat during a year were derived to help the client understand the market opportunity for marine outboard motor fuel additives in five countries.
Specialty Chemicals Market Future
Specialty chemical companies across the globe are facing perilous intersections of their own making. Business sectors will have to subsist with managing the unavoidable commoditization process. Companies that first succeed in identifying and analyzing the key components of their product lines and the nature of the businesses they possess will have a major role in shaping up the global specialty chemicals market.
A must-read case study for strategy experts and decision makers looking to develop a deeper understanding of the global specialty chemicals market
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A polymer is a class of synthetic or natural substance that is composed of macromolecules. They form the basis of minerals such as quartz, diamond, and feldspar. Polymers also include man-made materials such as concrete, paper, glass, plastics, and rubbers.
The growing demand for polymers can be attributed to the growth of end-use industries such as automotive, packaging, transport rails, telecommunication, and infrastructure from emerging economies. The increase in adoption of polymer-based products is mainly due to the lightweight, strength, and design flexibility offered by them.
However, the global demand for the polymer is expected to witness a substantial growth over the coming years due to several factors, including the rise in demand for plastics across several vertical industries such as food and beverages and packaging.
The Business Challenge
The client– A leading player in the chemical industry, specializing in the manufacturing of polymers
Revenue– >$30 million
Area of engagement– Market segmentation
Objective– To identify market segments with the most potential and address their specific needs to improve the overall market share. The primary intention was to focus on product development, marketing, and resource usage in segments with the most potential to multiply their service and marketing efficiency.
An international player in the chemical industry, specializing in the polymer manufacturing, wanted to implement precise market segmentation based strategies. As such the client approached our team of experts to leverage the use of Infiniti’s market segmentation solutions to gain detailed market insights.
The client also wanted to forecast and classify the demand in the global polymer market based on several factors such as demand category and regional distribution. The polymer manufacturing company also wanted to leverage the use of Infiniti ’s market segmentation solution to better understand the target market’s preferences and opportunities.
Their primary intention was to identify and segment the characteristics of the underlying market segments and use the extracted data for profitable and effective marketing. Additionally, the client also wanted to develop a strategic business plan to support the conclusion based on market segmentation.
Results– The market segmentation engagement unearthed a series of findings that played a key role in enhancing their local and global strategies. Our solution also helped the polymer manufacturer in understanding the global scenario and the competitive environment of the polymer manufacturing market space, which, in turn, assisted them in making better strategic marketing decisions and enhance their overall business growth.
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The market segmentation experts at Infiniti carried out extensive research comprising of interviews and discussions with leading stakeholders across the chemical industry to help the client improve business efficiency. The experts at Infiniti further compiled information from a wide array of secondary sources such as paid industry databases, company presentations, and industry forums to help the client understand the global competitive scenario.
The Solution and the Business Impact
Using primary data collected from approximately 200 channels, along with several secondary sources of information, Infiniti’s market segmentation experts evaluated the size and growth rate of the polymer manufacturing sector. With the help our solution, the client was able to determine customer needs, evaluate the competitive landscape, and analyze the value chain economics.
The market segmentation engagement also enabled them to improve their customer retention strategies by focusing on the most profitable customers. Leveraging market segmentation also offered detailed insights on market segments and opportunities in the market. Furthermore, this engagement provided information on the economic, competitive, and political environment in different segments, which influence the growth of the market. The solution offered also helped the client to improve their overall organizational performance by enhancing their business strategies.
Polymer market trends
- 3D printing technology– The emergence of 3D printing technology has brought substantial changes in the polymer sector. Several leading players in this sector have already adopted this technology and implemented it in their processes. Also, the emergence of industrialized 3D printing will affect a number of different operations within the polymer industry.
- Climate protection initiatives– Climate protection initiatives fuel sustainability practices within the polymer sector. Also, leading manufacturers of thermoplastic elastomers among other polymer manufacturers are currently developing sustainability practices to keep future generations safe from the negative impact of poor climate control. Moreover, technological innovations with a focus on renewable resources are also being developed to overcome such challenges.
- New processing trends and innovations– Major innovations that have taken place in the global polymer market space are the reuse of similar materials in different packaging and one-time use without needing costly sterilization. Also, some of the targets within the polymers market are to integrate more components into smaller packages and to develop low cost, high-quality products.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the chemical industry.
The global organic fertilizer manufacturing industry is projected to reach a valuation of over US$6 Billion by the end of 2025.
Today, with the increase in demand for pollution-free agricultural products and green products, the term ‘organic’ has become an irresistible trend of modern agriculture and is creating a buzz in the global fertilizer market. Swift development of organic agriculture coupled with augmenting demand for organic food is expected to increase the demand for organic fertilizer. Additionally, government and environmental policies minimizing wastage and reduction in the consumption of non-biodegradable raw materials have led to an increase in manufacturing of organic fertilizer.
However, our analysis of the global chemical industry space shows that organic fertilizer manufacturers are facing challenges in terms of:
- Raw Material Availability and Pricing: The organic fertilizer manufacturing industry faces serious challenges in the form of availability and fluctuating prices of raw materials required to produce fertilizers. The primary cause of fertilizer price fluctuations is related to the supply and demand factors.
- Distributors and Retailers: The demand for organic fertilizer is growing at a very fast rate. Distributors and retailers play a crucial role in the sales of these fertilizers. The overall sales for various grades organic fertilizer is growing at a significant pace, yet some companies are facing major challenges due to the decline sales in the respective grade.
Therefore, it is best recommended for organic fertilizer manufacturers to leverage the use of market entry advisory solutions. Market entry advisory solutions help companies in the global chemical industry space to beat the competition, increase sales, enhance brand awareness, and improve overall business stability. These solutions also help firms identify the potential bottlenecks in terms of the barriers to entry and improve business efficiency in areas such as sales, marketing, and delivery.
The Business Challenge
- The client: An organic fertilizer manufacturer
- Revenue: $1.8 billion
- Area of Engagement: Market entry advisory
The client, a leading chemical industry player specializing in the manufacturing of organic fertilizer with distribution centers spread across the globe, wanted to understand the competitive environment and devise a one-size-fits-all approach to improve the quality of their offerings. This was because the client was facing predicaments in operating new businesses in niche markets and accordingly allocating the resources to target the price-sensitive customers.
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To help the organic fertilizer manufacturer gain insights into the competitive nature of the global chemical industry and help them penetrate the niche market segments, Infiniti’s market entry advisory experts carried out extensive research with leading stakeholders in the chemical industry space. The experts further amassed information from various proprietary sources including paid industry databases, company presentations, and industry forums.
The Solution Benefit and the Business Impact
With the help of Infiniti’s market entry advisory solutions, the organic fertilizer manufacturing client was able to effectively tailored product offerings and price to suit the requirements of the global chemical industry. The client also identified the potential technologies prevailing in the market, analyzed the present market conditions, and made strategic business decisions. This helped them build strong customer relationships.
Liquid fertilizers have the characteristic of rapid absorbability by soil, which in turn ensures that nutrients reach crops faster than other forms of fertilizers. Therefore, the application of liquid organic fertilizer is expected to become popular among farmers in the coming years, thereby, opening new opportunities for the organic fertilizer industry.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the latest chemical industry
The world is witnessing a rise in the popularity of innovative and powerful materials, ushered in by the technology trends in the chemicals industry. But to be central players in this story, today’s incumbent players in the chemicals industry will need some vital prerequisites, which include restructuring of their product portfolios, rewriting business models to generate higher returns on their investment in innovation and successful exploitation of digital technologies.
After the 1980s, though, the pipeline of new products has largely dried up. However, in the next 30 years, companies in the chemical industry will focus on growth through global expansion. In fact, chemical producers were one of the first industrial companies that extensively leveraged digital technology trends by using digital controllers and sensors to optimize production and control plant operations. However, in recent times, the chemicals sector has slowed its pace of digital innovation while other sectors, such as retail, banking, and telecommunications, have taken the lead, embracing digital innovation in customer engagement and operations. But the good news is that now some chemical executives are innovating again to find new value through digital technology trends. Here are top four technology trends that are fostering innovation and change in the chemical industry:
Supercomputing eliminates the separation of transactions and analytics. This technology enables processes that can run in minutes, bringing real-time business that changes how people work and how business is optimized. Changes to businesses can now be made in one-tenth of the time, providing chemical firms with superior business agility. Transactions can be run on any device through the use of applications for business users, data can be mined at any level of granularity, and simulations and predictive analytics can be used to develop the perfect decision. The total cost of ownership can be decreased, enabling simplification and reducing failure. Companies in the chemical industry can now shift their IT spending to innovation and value creation.
Technology trends such as hyper-connectivity will make an impact on four main elements: people, business, communities, and sensors. Players in the chemical industry are experiencing new market opportunities with more people being connected to the internet and a rise in the connection between business and suppliers through digitization. New communities are being leveraged to enhance customer engagement, drive personalized experiences, and align efforts across the value chain to maximize value potential.
The chemicals industry’s migration to cloud computing may take time for companies but beginning the journey early can deliver some substantial financial benefits. Executives are still grappling with its risks, possibilities, and the cost of writing off current IT investments. However, for several companies, the transition to a hybrid cloud environment is already underway. Those that move early to embrace this future will position themselves to be tomorrow’s high-performance businesses.
With the risk of corporate spying and digital theft, there is a stronger need for chemical companies to set and execute digital strategies. Companies in the chemical industry must now stay compliant with data privacy and regulations, and value chain interactions must be secured. Access to digital information should be restricted to authorized users and there should be central authentication, regardless of device. Partnering with trusted suppliers is key; establishing trust is important as more non-core processes are outsourced. Companies should build relationships with few partners who meet highest security standards to ensure a simpler architecture.
To know more about the technology trends in the chemical industry
The global ceramic coating market is anticipated to reach a value of $10 Billion by 2020.
Typically, ceramic coating promotes increased heat resistance coupled with fewer emissions to the atmosphere. Such factors are likely to supplement the growth prospect of the ceramic coating market in the coming years. Additionally, these products are gradually finding applications on metal parts in vehicles owing to its suitable properties of corrosion and abrasion resistance along with it being an excellent thermal barrier. Furthermore, with growing R&D activities, ceramic coating manufacturers have started venturing into broader application segments. Presently, transportation and automobile are expected to be the largest application segments for ceramic coatings. However, with further product innovations, ceramic coating is likely to have a larger application share than its counterparts such as conventional coatings in the coming years.
The Business Challenge
- The client: A ceramic coating manufacturer
- Size: >$ 2.16 billion in revenue
- Area of engagement: Product segmentation
The client, a manufacturing major specializing in ceramic coating, wanted to analyze the regulations and investment options in the chemical industry space to secure potential customers. As a result, the client wanted to categorize their potential competitors and their product positioning strategies. Additionally, the client wanted to gain improved transparency into the chemical industry space and devise robust strategies to enhance sales performance.
Want more information about our product segmentation engagement for ceramic coating manufacturers?
To help the ceramic coating manufacturer profile key target segments, the product segmentation specialists at Infiniti carried out a comprehensive research comprising interviews and discussions with leading stakeholders in the chemical industry. The specialists also compiled information from a wide array of sources such as paid industry databases, company presentations, and industry forums.
The Solution and the Business Impact
The ceramic coating manufacturer was able to leverage the use of demographic parameters to segment their target audience effectively with the help of Infiniti’s product segmentation engagement. The client also understood customer personality traits, values, attitudes, interests, and opinions. This helped them divide a broad target segment into subsets with similar desires and needs. Furthermore, the client improved product launches and enhanced brand awareness.
Incumbent ceramic coating manufacturers must prepare for further encroachment of commoditization and erosion of their historical advantages when attackers from developing markets gain more experience and become increasingly technologically savvy. Additionally, the value-add potential of many chemical industry conglomerates will be challenged more intensely than ever, and so will their questionable claim that they can upgrade their portfolio in a way that generates value for shareholders.
Why leverage product segmentation strategies?
Our analysis of the global chemical industry shows that ceramic coating manufacturers are facing challenges in terms of:
- Growing competition: Staying ahead of the competitors becomes challenging for ceramic coating manufacturers as the threat of new entrants in the chemical industry is relatively high. Moreover, the chemical industry is also witnessing competition from non-traditional sectors including the utilities, energy, and mining. These factors are pressurizing firm to become agile and stay in the competition.
- Stringent regulations: Today, the chemical industry is witnessing strict regulations right from manufacturing, labeling, and handling to the supply and storage of their end products. These regulatory fluctuations are driving leading firms to migrate toward the cloud to meet the mandates of the governments.
To address these challenges mentioned above, it is essential for ceramic coating manufacturers to utilize product segmentation solutions. Product segmentation solutions help firms devise robust segmentation strategies to meet the preferred traits of respective markets. These solutions also assist companies in profiling the right customers and channel their resources and efforts accordingly.
A must-read case study for strategy specialists and decision makers looking to develop a better understanding of the chemical industry
Innovation is considered to be the cornerstone of profitability and growth for chemical companies and a prerequisite for long-term performance in the industry. While most chemical innovation continues to be solidly rewarding and returns well above the cost of capital, there are chances of major variations in the outcomes of innovation projects. Therefore, deciding on how and where to deploy capital may be one of the most challenging tasks for executives of chemical companies. Responsible deployment of capital and the sustainable use of ongoing resources is critical to the success of mega-project development. Therefore, it’s not enough to understand past successes or failures. To plan investments that will meet the near- and mid-term goals, companies also need to be able to anticipate potential outcomes catalyzed by factors such as feedstock, technology, and regions.
How technology and market familiarity affect financial returns in the chemical industry?
Chemical engineers and other researchers are continually introducing new innovations. The development and commercialization of these new technologies, which are highly disruptive will impact capital deployment decisions. The rate of return on a project that involves innovation-investment also varies depending on the company’s level of familiarity with the market and the technology. For instance, several companies are finding new ways to support molecular valorization, the practice of enhancing the value of feedstocks, which is a key goal of disruptive technology development.
How can chemical companies improve innovation performance?
There is immense scope for improvement in terms of innovations for chemical companies. Here are areas where change can have a significant impact on chemical companies:
Improve innovation discipline
Most innovations, especially those that involve new technologies, require the deployment of new capital during commercialization. If performed incorrectly, this additional capital requirement can easily destroy innovation returns. Many chemical companies consider that new products must be launched from full-scale plants to meet cost targets and qualification requirements. Chemical and material innovations are most often adopted at a higher cost than other essential products. Instead of deploying large amounts of capital to build world-scale plants, companies should take a measured approach with flexible pilot plants that allow for modification of properties to meet market needs. This approach reduces overall risk in two ways: it lowers the total capital outlay and also increases the probability of adoption.
Improve market-insight capabilities
Chemical companies are often good at understanding the needs of existing customers in existing markets. However, they have proved to be weaker at generating insights about new markets. Hence, the risks of market entry for companies in the chemical industry are similar to those of developing a new technology. The focus on market insight capabilities at most chemical companies to be far lower than the focus on technology capabilities. While developing market insights is neither easy nor cheap, doing so is far quicker and less expensive than developing a technology. Investing in this area reduces risk, accelerates commercialization, and increases returns. If done well, market-insight capabilities will prove to effectively be a force multiplier for technology investment.
To know more about how to improve return on investment in the chemical industry
Revenue growth in the chemical industry is a result of higher prices and improving global economic conditions leading to enhanced demand in the end markets.
In the chemical industry, base chemicals are produced in large quantities and are generally sold to other end-use sectors or are used for the manufacture of products within the chemical industry. Base chemicals are classified into two groups namely:
- Organic base chemicals
- Inorganic base chemicals
The inorganic base chemicals include hydrogen chloride, calcium carbonate, nitric acid, sulphuric acid, and other such compounds. It also includes soaps and surfactants, fertilizers, and building materials. Organic base chemicals are either building blocks such as propene, ethene, and benzene or compounds made using these building blocks such as methanol and ethanoic acid.
Additionally, a significant growth contributor is the increase in global sales in the automotive industry, which is a major market for chemicals due to the high volume of chemical products used in the development process. However, for leading players in the chemical industry, agriculture and sustainable housing seem to be the two global megatrends helping them gain a competitive advantage.
The Business Challenge
The client– A leading player in the chemical industry specializing in the manufacture of base chemicals
Revenue– >$2.8 billion
Area of engagement– Market Assessment
Objective– To leverage market assessment to understand the market conditions and identify the potential market risks and opportunities.
A leading player in the chemical industry and an international manufacturer of base chemicals wanted to gain detailed insights on the market conditions. The client wanted to leverage the use of Infiniti ’s market assessment solution to better understand the market risks and opportunities. Their primary intention was to understand and anticipate the market situation of its operating subsidiaries in specific geographies. A decision to invest or close the subsidiary was to be based on the result. Their objectives included an assessment of the market by value and volume, state of the market, and identification of the key competitors and their performance in the market.
The base chemicals manufacturer also wanted a detailed report on the entry barriers, new opportunities, risks, and competition in the chemicals industry market space.
Results– Offered detailed insights on the global chemicals industry, which helped them make informed decisions. The market assessment solution also enabled the base chemical manufacture in developing an action plan for addressing the identified issues.
Want more information about our market assessment solutions for the base chemical manufacturers?
The market assessment experts at Infiniti carried out extensive research comprising of interviews and discussions with leading stakeholders across the chemical industry to help the client improve business efficiency. The experts at Infiniti further compiled information from a wide array of secondary sources such as paid industry databases, company presentations, and industry forums to help the client understand the competitive scenario.
The Solution and the Business Impact
With the help of Infiniti’s market assessment, the client was able to identify the market situation in specific geographic areas of their interest. Also, the base chemicals manufacturer was able to gather targeted data regarding the potential risks and opportunities in the chemical industry.
Leveraging market assessment also offered detailed insights on market growth, opportunities, trends, risks and key players in the market. This engagement also provided information on the economic, competitive, and political environment affecting the base chemicals firm. The market assessment engagement also helped the client to improve their overall organizational performance by enhancing their business strategies.
The rising demand for base chemicals lays the foundation for the growth of the chemical industry firms and subsequent industrial value creation. The global market for base chemicals is expected to grow further owing to the high demand from end-user industries such as soaps and detergents, fertilizers, textiles, and pulp & paper.
Moreover, factors such as intellectual property, customer and feedstock proximity, and technology know-how no longer help secure a sustainable competitive advantage. Players who are early adopters of innovative business models have the unique opportunity to act as game-changers in the global basic chemicals manufacturing space.
Chemical industry challenges
- Commoditization of specialty chemicals– The financial performance of specialty chemicals companies has stagnated as many chemicals have become commodities. Also, leading players with broad specialty portfolios are in the undesirable position of having to refine their business models to reflect this sharp drop in pricing power.
- Constant changes in innovation– With rapid technological advancements, the end-users’ demand for faster launch, less expensive products, and efficiency has increased. Therefore, chemical industry players must focus on inventing new entities and business models to enhance the product management strategies.
To successfully implement market assessment solutions in their business processes, base chemicals manufacturers need to understand that market intelligence is the foundation of collective intelligence. Moreover, it is essential to have a logical and structured action plan complete with KPIs and project success indicators that offer a clear direction and instill confidence when implementing an action plan.