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Market Opportunity Assessment for the Specialty Chemicals Market

Specialty Chemicals Market: Why is a Market Opportunity Assessment the Best Way Forward?

The specialty chemicals market is highly complex and competitive. The most prominent segments of this market are specialty polymers, surfactants, flavors and fragrances, electronic chemicals, and industrial and institutional cleaners.

Specialty chemicals are in high demand and have a high growth rate due to the purpose they serve in industrialization, which is a widespread global phenomenon currently. As a crucial addition to the cleaning, disinfectant, and food industries, it is also seeing higher demand due to the current COVID-19 global pandemic.

As emerging markets are proliferating, the largest contributors to the specialty chemicals market are Germany, North America, Netherlands, China, and India. The highest consumers over the past few years have been China for antioxidants, construction, water management systems, and more; North America for agriculture, food, cosmetics, oil field chemicals, and more. Other countries with high consumption rates are India, Japan, and other developing countries and emerging markets due to rapid industrialization.

Emerging markets reflect a higher growth rate because they are calculated from a lower base and are growing rapidly in both demand and consumption. As of 2018, the highest consumption of specialty chemicals was found in the automobile, food, aerospace, agriculture, textile, and cosmetics industries, in no order.

However, as every market does, even the highly demanded specialty chemicals market is faced with various challenges, and key players are attempting to adapt efficiently. Currently, specialty chemicals market players need to identify the ideal opportunities to grow with the growing demand. In this article, industry experts from Infiniti Research discuss the major factors affecting the specialty chemicals market and the solution to identifying market opportunity.

Speak to Infiniti’s industry experts to gain more in-depth insights into the fast-growing specialty chemicals market.

Factors Affecting the Specialty Chemicals Market

The specialty chemicals market is highly influenced – positively and negatively – by various factors. Before employing a solution, it is crucial to gain a comprehensive understanding of the challenges and opportunities within the market. The following two factors majorly affect the specialty market.

High Demand:

With the constantly developing supply chain management systems, eCommerce purchasing, and strategic sourcing, transparency has increased. Therefore, higher consumer awareness has led to the exponential rise in demand for specialty chemicals across industries. Specialty chemicals have now become a commodity-like addition to every industry that it plays a role in. While this is beneficial for the market, the higher demand has led to a rise in R&D, raw material, and energy costs. To recover these high costs and improve their margins, specialty chemicals producers have raised the prices of their product.

Additionally, the demand for cleaning agents, sanitization, and hygiene has risen over recent months, due to the COVID-19 pandemic, making specialty chemicals a crucial commodity in the industrial and institutional cleaning industry. Apart from the increased demand for cleaning agents at an individual are family level, major spaces like hospitals, hotels, and community living spaces are in constant need of proper cleaning agents. Further, long-lasting food items with preservatives are in higher demand due to long durations of quarantine across the world.

Emerging markets and developing countries:

The increase in industrialization, trade liberalization and the growing demand for technological advancements in developing countries across the world largely contribute to the growth of the specialty chemicals market. The demand for electronics has grown vastly over recent years of change, and specialty chemicals play a crucial role in the development process of the same. Similarly, construction chemicals and fuel are in high demand across developing countries, which in turn increases the growth of the specialty chemicals market. However, a challenge posed by emerging markets and developing countries is the continually changing regulations regarding additives to food, and chemicals for other manufacturing industries. This could be detrimental to the global growth of the specialty chemicals market.

Understanding the market is the first step towards succeeding in it. Get more information on the factors affecting the specialty chemicals market to strategically prepare for the forecasted growth.

Preparing for Forecasted Growth

As the specialty chemicals market continues to grow at a substantial rate, market players need to prepare strategically. This requires understanding the upcoming market trends and changes and their risks and opportunities. While high demand and global market growth are positive news for specialty chemicals producers, strategically analyzing the challenges and ideal opportunities for growth and equipping their companies for the same is crucial. An unplanned approach leads to higher risks and may lead to losses in terms of opportunity and revenue.

Market Opportunity Assessment for the Specialty Chemicals Market

More importantly, for new entries, the market holds a range of challenges and potential barriers to market entry. Infiniti’s market opportunity assessment allows businesses to plan a comprehensive approach to all potential barriers and assess the market’s preparedness for new offerings. With the specialty chemicals market, as the industry continues to grow, some players are creating barriers for new market entries by focusing on service rather than products. With competitors focusing on building relationships and good customer service, the challenges of entering with new offerings and attempting to build new relationships are much more. Infiniti’s research experts offer the appropriate data, approach, and actionable strategies for businesses to successfully deliver their new offerings into a highly competitive and challenging market such as this.

Entering a new market is challenging, especially one that is growing as exponentially as the specialty chemicals market. Infiniti’s market opportunity assessment can offer you strategic insights on all opportunities and actionable solutions for all potential barriers when entering this market. Request a free proposal to learn more about the readiness of the specialty chemicals market for new offerings.

How International Specialty Chemical Companies Can Win Big in China

Even though China’s specialty chemical market has nearly doubled in size over the last decade, not many international specialty chemical companies have been successful in fulfilling their growth and profitability aspirations from this market. Foreign companies in the sector are facing major setbacks in terms of growth and market share in China. Our market research experts suggest that margins in specialty chemicals in China market for international companies are structurally lower than in other regions and also show wide variance between leaders and laggards. The highly fragmented specialty chemicals market in the region is dominated by overcapacity and intense competition.  Although some argue that the lower margins are a part of their global strategy to capture growth in China and establish a long-term presence in the country, there are evident signs that international companies are failing to keep up with the market’s growth.

Considering the fact that China’s specialty chemical market is witnessing steady growth, international specialty chemical companies operating in China must rethink their existing approach and strategies to avoid getting left behind.

Identifying the problem areas for specialty chemical companies in China

The performance shortfalls of international specialty chemical companies in China are fueled by a number of factors. This includes:

  • Insufficient tailoring of products to suit the Chinese market and counter offerings of Chinese competitors
  • Western companies have limited access to important potential customers (SOEs and fast-growing private organizations in second and third-tier cities)
  • Lack of in-depth market insight, insufficient relationship-building capabilities, and a lesser number of entrepreneurial Chinese top talent in key company positions
  • Increasing number of local Chinese competitors that are able to offer products and compete for high-end segments
  • Highly effective and entrepreneurial incentive structures by aggressive private entrepreneurs demonstrating capabilities to make investments at lower rates of capital expenditure
  • Rapid adoption of western technical-know-how and technologies by Chinese competitors, making it easier for them to offer highly competitive products

Infiniti’s market entry strategy has helped several global companies enter and establish themselves successfully in foreign markets. Planning to venture into new territory? Request a free proposal to know how our solutions can help your business.

How international specialty chemical companies can rethink their market strategy

International specialty chemical companies operating in China can learn from their past mistakes and strategize to reengineer their operations to thrive long-term in the country. Correctly positioning themselves in the market will prove crucial for specialty chemical companies over the next decade. Experts at Infiniti Research has listed below some steps that companies must consider making a part of their approach.

Build market and segment level insights

Specialty chemical companies must take into consideration China’s growth trajectory while evaluating specific segments for its growth potential in the country. Experts at Infiniti Research suggest that specialty chemical companies must consider adopting a granular approach that considers regional differences when assessing various specialty-chemical segments. Careful assessment of second and third-tier cities may also show signs of higher growth potential in the years to come.

Develop products tailored to the Chinese market

Designing products to meet the demands of Chinese customers at competitive price points is crucial to success for international specialty chemical companies in the long run. Providing more sophisticated products to Chinese customers would be crucial as local competitors are increasingly adopting western technologies to develop new and improved products. Specialty chemical companies must provide their local teams in China with maximum resource support and operational authority to launch products that are tailored to Chinese consumers.

Learn from past investment mistakes

Making the Chinese market a central part of your company’s long-term growth strategy and investment plans is pivotal in bringing success to your business operations in China. Prioritize on long-term goals and analyze the track record of international specialty chemical companies in China to learn from their previous errors.

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Specialty chemicals

Increasing Market Share by 27% for a Specialty Chemicals Company | Infiniti’s Latest Competitive Intelligence Engagement

Global Specialty Chemicals Market Analysis

The growing demand from industries such as textiles, automobiles, and food are expected to drive the growth of the specialty chemicals market. However, the rapidly changing product portfolios, lack of visibility into demand patterns, increasing demand for tailored products, and sustainability issues are posing challenges for companies operating in the specialty chemicals market. In order to gain a leading edge and succeed in the long-run, specialty chemicals manufacturers will need to tackle the challenges coming their way and adapt to the fast-changing marketplace.

With increasing product innovations in the specialty chemicals sector, companies will need to identify business gaps and differentiate their offerings. Our competitive intelligence experts can help you to identify hidden opportunities in the market and gain a competitive edge. Request a FREE proposal today!

Business Challenge

The client is a specialty chemicals company based out of Central Europe.

Our client, a specialty chemicals company, wanted to gather comprehensive insights into their competitors’ business strategies. They wanted to understand the areas that their competitors performed comparatively well. Additionally, they wanted to identify the hidden opportunities in the market and differentiate their offerings to gain a leading edge in the market. The specialty chemicals industry client also wanted to understand how their competitors dealt with supply chain challenges and efficiently managed supply with demand.

Other challenges faced by the client included:

1Specialty chemicals industry challenge #1: Changing business portfolios

Product portfolios were changing rapidly in the European specialty chemicals market. The client, therefore, wanted to understand how the top companies in the European specialty chemicals market kept pace with the rapidly changing product portfolios.

Specialty chemicals industry challenge #2: Supply-demand mismatch

The client’s lack of visibility into demand patterns in the market resulted in huge losses for the company. This even made inventory management difficult for the client. They wanted to analyze how their competitors accurately forecasted the product demand in advance and efficiently managed supply chain operations.

Specialty chemicals industry challenge #2: Rising need for tailored products and services

As leading companies in the European specialty chemicals industry have already started customizing product and service offerings for their customers, the client wanted to understand their competitors’ key capabilities and differentiate their product offerings.

What to know how well you perform in comparison to your competitors? Our competitive intelligence experts can help. Contact us today!

Our Approach

The experts at Infiniti Research adopted a four-phased approach that involved:

2Competitor analysis engagement to profile the top companies in the European specialty chemicals market. This phase of the engagement also involved analyzing competitors’ product offerings, key capabilities, customers, and marketing initiatives.

Competitive pricing analysis to analyze the different pricing models and evaluate the price gaps between the client and their competitors.

Demand management study to analyze the factors impacting the specialty chemicals demand in Europe.

Competitive benchmarking analysis to compare the client’s offerings with that of their competitors. This phase of the engagement also involved analyzing areas where the client performed well or lagged in comparison to their competitors.

Results Obtained

The insights obtained from Infiniti’s competitive intelligence engagement helped the client to gather comprehensive insights into their competitors and develop a detailed understanding of the attractiveness of market opportunities for their product and service offerings. The client was able to keep up with the changing product portfolios and differentiate their product offerings. By efficiently forecasting the market demand for specialty chemicals in advance, they were able to better plan production and inventory.

With Infiniti’s competitive intelligence solution, the client was able to uncover profitable opportunities in the market and strengthen their brand value. In addition, by efficiently managing supply-demand mismatch and delivering high-quality products, they were able to enhance their sales rate. Within one year, the company was able to witness an increase in their market share by 27%.


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Chemical market analysis

Market Intelligence Solution to Support Data-Driven Strategies for a Specialty Chemical Company

Specialty Chemicals Industry Analysis

The specialty chemicals industry is far more competitive than it used to be probably a decade ago. Rapid globalization, lack of visibility into demand patterns, and sustainability issues are increasing challenges for specialty chemicals manufacturers and distributors. In order to succeed in the long-run, companies in the specialty chemical manufacturing industry will need to understand challenges coming their way and leverage strategic planning to overcome them.

Specialty Chemicals Industry

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Business Challenge

The client is a specialty chemical manufacturer and distributor based out of the United States

The client faced difficulties in keeping pace with the market transformation and adapting to the fast-changing marketplace. Also, with the entry of new players in the market, the client observed a steady decline in their sales rate, which further resulted in huge losses in their profit margins. As such, the company in the specialty chemicals industry realized the need to conduct a market intelligence analysis to understand the industry’s fluctuating dynamics, as well as the market trends and opportunities.

Furthermore, by leveraging Infiniti’s market intelligence solution, they wanted to tackle challenges such as:

Specialty chemicals industry challenge #1: Push for globalization

With foreign countries such as Germany and Canada offering lucrative opportunities for specialty chemical companies, the client wanted to conduct a market intelligence study to identify profitable opportunities in these regions. Also, they wanted to understand the capital investment for entering German and Canadian specialty chemicals industry.

Specialty chemicals industry challenge #2: Lack of visibility into demand patterns

The company faced challenges in forecasting the product demand with complete accuracy. As a result, they faced difficulties in managing inventory and planning their workforce. With Infiniti’s market intelligence solution, they wanted to identify factors affecting the specialty chemicals demand in the market. Furthermore, they wanted to efficiently forecast the product demand in advance and reduce issues related to supply-demand mismatch.

Specialty chemicals industry challenge #3: Pricing challenges

The rapid pace of change in raw material price, shipping rates, and tariffs made it difficult for the company to competitively price their products. Therefore, the company wanted to engage in strategic planning around their pricing structures.

Specialty chemicals industry challenge #4: Evolving regulatory requirements

With Infiniti’s market intelligence solution, the client wanted to keep up with the regulatory changes and ensure adherence to both processing requirements and product quality standards.

With over 15 years of experience in serving companies across the globe, our industry experts can help you devise strategies to capitalize on new market opportunities. Contact us today!

Solutions Offered

To help the client tackle the industry challenges, the experts at Infiniti Research conducted a comprehensive specialty chemicals industry analysis. This phase of the engagement helped the client to assess competition in the local market and understand the industry transformations.

Our market intelligence engagement also involved the German and Canadian specialty chemicals market intelligence study. This helped the client to pursue profitable opportunities in the Canadian and German specialty chemicals market. Also, the company in the specialty chemicals industry was able to evaluate the capital requirements for entering these regions.

Our experts also conducted a demand and supply analysis. This helped the client to efficiently forecast the product demand and maintain adequate stocks in-hand.

By conducting market scanning and monitoring analysis, our experts also helped the company in the specialty chemicals industry to identify changes in emerging regulations and better prepare for changes pertaining to industry regulation.

Results Obtained

The insights obtained from Infiniti’s market intelligence engagement helped the company in the specialty chemicals industry to reduce time to market and understand the factors affecting their business growth. Furthermore, the client was able to adapt to the fast-evolving marketplace, competitively price products, and lower risks of stockouts and over-stocks.

As a result, the company witnessed a huge increase in their sales rate. This subsequently helped the company in the specialty chemicals industry to enhance sales by 29% in one year.

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Chemical market analysis

Navigating Complexity for Specialty Chemical Companies: 8 Major Roadblocks and How to Over Them

With plummeting profitability and increasing market competition, specialty chemical companies are undergoing several unique challenges. They must identify strategies to pull through such roadblocks in order to survive in the long run.

The global specialty chemicals market continues to expand at a rapid pace. This growth has been underpinned by factors including increased productivity, sound business models, and portfolio restructuring. However, market growth isn’t exactly good news for the existing companies in the specialty chemicals industry. The flourishing market means that it would draw in more players and add on to the competitive pressure in the industry. Therefore, survival for specialty chemical companies greatly depends on understanding the most pressing challenges and leveraging insightful strategic planning to overcome them.

Key challenges facing specialty chemical companies 2019

specialty chemical companiesChanging business portfolios

Specialty chemical companies are increasingly being transformed through increasing product diversification and rapid merger and acquisition activities. Business portfolios of specialty chemical companies are constantly changing as producers add and dispossess divisions, engage in new market entries, and participate in mergers. Moreover, globalization has increased the business portfolio complexity of specialty chemical companies.

Dynamic demand patterns

One of the key challenges faced by specialty chemical manufacturers is uncertain and unpredictable demand patterns. They also have only limited visibility into future customer orders. The growing customer portfolios spanning over several end-use markets and visibility into demand variability represents significant challenges for specialty chemicals manufacturers.

Specialty chemical companies are currently facing several unique challenges. Fortunately, there are some strategies that specialty chemicals producers can take to support success. RFP for more insights.

Expanding product portfolios

In order to increase differentiation, strategize new market entry, and maximize customer loyalty, specialty chemical companies are continuously experimenting with new product innovations. New product introductions coupled with frequent adaptation of existing products have caused a significant rise in the number of products produced, consequently, leading to greater operational complexity.

Regulation and compliance

Specialty chemicals manufacturers are increasingly facing issues in documentation and certification of product quality and procedural compliance. These issues are largely driven by government regulations, end-use market requirements, or specific customer requirements. Furthermore, batch and lot level traceability requirements are becoming common in several segments and add to the complexity of operations.

Increasing customer intimacy

Specialty chemical companies are increasingly adopting the trend of moving closer to their customers by offering them tailored products and customer-specific service arrangements. Although moving closer to the customers has been a source of differentiation for specialty chemical companies, it has resulted in increased complexity of other business operations.

Get in touch with an analyst to know how we help clients in the chemical industry to keep track of market challenges and learn how our tailor-made solutions can help overcome major roadblocks in the market.

Industry price changes

The raw materials used by specialty chemical manufacturers are often priced on the higher side. The market fluctuations between countries often leave manufacturers vulnerable to the associated price drops. For instance, the 2014 shale gas price drop in the US resulted in heightened competition in Europe. This placed additional pressure on manufacturers in an already high-pressure market.

Growing demand for multi-stage manufacturing

Customers are increasingly seeking specialty chemicals that can only be produced through complex, multi-stage, multi-product processes that require more time to complete and an extensive list of components. Both of these can largely cut into the profit margin of specialty chemical companies.

Technology upgrade requirements

Most of the digital technology available today can be both a boon and a bane for specialty chemicals companies. While tools like IoT, artificial intelligence, and blockchain provide several advantages, implementing and integrating them into existing processes can be a time consuming and labor-intensive process.

Learn more about Infiniti’s tailor-made solutions for specialty chemical companies

Specialty Chemicals Market Size Forecast: An Infiniti Research Case Study

With lower returns on investment and a more competitive market, specialty chemicals companies face unique roadblocks and must find new ways to grow. Click To Tweet

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 Request Proposalcope with the current complexity is resulting in higher costs, more unforeseen consequences, and lost opportunities for specialty chemicals companies.

Business Issues

  • The client: A specialty chemicals market player

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

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Client Journey

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 theGet More Info 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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Market Assessment: A Success Story on How We Assisted a Prominent Base Chemicals Manufacturer Understand and Anticipate the Market Situation of Their Operating Subsidiaries

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 theIR_RFP 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

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.

Base Chemicals

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The Journey

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 Future

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.

A must-read case study for strategy specialists and decision makers looking to develop an understanding of the base chemicals industry.


Market segmentation

The Growth of Specialty Chemicals Industry in Emerging Markets

The specialty chemicals industry is set to grow at an exponential rate owing to factors such as new end-use applications, rise in innovation, demand for efficient and safe chemicals, and growing environmental concerns. Specialty chemicals is a niche segment in the global chemical industry that offers special chemicals and polymers with the capability to improve performance. Specialty chemicals find wide spread IR_Brochureapplication in various industries such as textile, printing, consumer goods and retail, electronic, and oil and gas. North America was the world’s largest market in the specialty chemicals market across the globe. However, with the rise in the demand for niche chemical products in the emerging markets, Asia is set to change the market landscape with major chemical companies shifting their manufacturing base to such locations.

Chemicals Industry – Falling Demand in Developed Markets 

The global chemical industry is matured, highly saturated in the developed countries, and prone to changes in economic conditions, stringent carbon emission policies, and regulatory compliances. Additionally, the chemical industry is plagued with the sudden surge in raw material prices and increasing environmental concerns. The industry witnessed a decelerating growth in developed countries due to the economic downturn, which led to a decrease in production and demand from industries such as automotive, electronics, and construction. However, in emerging markets such as China and India as opposed to developed countries, the chemical industry is witnessing an upward trend, which is a positive sign for the overall market.

Specialty Chemicals Industry – What’s Driving Growth in Emerging Markets?

Specialty chemicals, in simple terms, are high-end versions in the chemical supply chain, used in smaller proportions as compared to their commodity grade counterparts. Specialty chemicals enhance performance, provide specific functionality to the end products, and offer a combination of innovation and customer service. The emerging markets look promising for the specialty chemicals industry as future growth is projected from developing countries such as China, India, Korea, and Brazil. As more and more chemical companies are gradually shifting their production bases to low-cost locations, the demand for specialty chemicals is projected to rise with the growth in competition. But why the increase in demand in emerging markets, you ask? Here’s why.

  • The emerging markets offer new growth opportunities for chemical companies to grow and expand their market share by customizing their product offerings
  • With the growing middle-class population in developing countries and rising industrialization, the demand for improved crop quality drives the demand for cost efficient chemical systems
  • The export scene for the specialty chemicals industry is set to grow by leaps and bounds in the emerging markets as a result of the sudden surge in the demand for niche chemical products across several major industries
  • Emerging markets have low labor costs, efficient manufacturing capabilities, and supportive government policies, which makes it a favorable destination for major global players in the chemical market

Apart from these, governments in developing countries are developing friendly policies that facilitate the growth of the specialty chemicals industry by encouraging global players to invest in these regions, upgrading the chemical industries and manufacturing capabilities, and redesigning the industrial training institutes to build efficient domestic workforce.

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Can Oleochemicals Reduce America’s Dependence on Petrochemicals?

Oleochemicals is one of the best substitutes for petrochemicals and is being widely applied in several industries across the globe. Derived from animal and plant fats, these chemicals and its derivatives have gained popularity due to its performance, functional efficiency, and sustainability. Especially in America, the growing demand for oleochemicals has led industry experts to believe in a decade the country’s dependence on petrochemicals will reduce significantly.

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How Oleochemicals Reduce American’s Dependency on Petrochemicals?

Almost all modern industries are heavily dependent on petroleum and allied products. Petrochemicals are extensively used for fuel production, plastic industry, the medical sector, and fertilizers. Critics are against the use of petrochemicals because when released into the ground, air, and water it can have adverse effects on the environment and human life.

Petrochemicals tend to get absorbed easily into the skin, resulting in allergies, hormonal disorders, asthma, and congenital disabilities. One such petrochemical which is under the scanner is bisphenol A (BPA). Used in many plastic-based products, especially baby bottles, BPA can disturb the hormonal balance and affect the normal growth of the child.

Oleochemicals to the rescue

Though a lot like petrochemicals, oleochemicals are biodegradable, pollution free, and very low in toxic levels. It is already being used in the production of biodiesel, bioplastics, and lubricants. These chemicals are also being employed in the textiles, personal care, pharmaceuticals, and food & beverage industry.

The USA is one of the biggest producers as well as consumers of petrochemicals. Owing to its commitment to green energy and reducing carbon emissions, policymakers in the US are encouraging industries to adopt oleochemicals. Some of the major names in the United States oleochemicals market like Emery Oleochemicals and Vantage Specialty Chemicals already have a significant presence across value chains

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Changes in U.S. regulations and the ban on trans fats, along with tax incentives to encourage biofuel consumption are some of the major factors which have increased the demand of oleochemicals in the United States. According to industry experts, the personal care & cosmetics segment has emerged as a major user of these chemicals and its derivatives. The textile segment and consumer goods industry are other sectors which have replaced petrochemicals with oleochemicals. With more industries switching to oleochemicals, it is very clear that America’s dependency on petrochemicals is sure to reduce significantly.

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Construction Chemicals– Making Green Buildings a Reality

A niche segment of the chemical industry, construction chemicals improves the overall quality and durability of the buildings. Widely used as bonding agents, tile adhesives, expansion & crack joint filters, and plasticizers, these chemicals increase the overall life of the construction work along with providing protection against environmental hazards. With growing demand for green buildings, the adoption of these chemicals in the construction industry has grown manifold.

Why the need for green buildings?

There is more to the idea of green buildings than just being part of the ‘go green’ trend. According to experts in environment studies, around 40% of the GHGs and wastes come from the construction industry. A rather resource intensive industry, constructing a building consumes a lot of natural resources. As a result, there has been an increase in demand for buildings which not only add aesthetic value to the location but are also examples of sustainable development.

Green buildings are constructions which cause a negligible impact on the natural environment of the project site. According to the United States Environmental Protection Agency these are structures built using processes which are resource-efficient and environmentally responsible. Also known as high-performance buildings, this idea extends beyond buildings and covers issues like site planning, land-use strategy, and community building.

Construction chemicals and green buildings

The growing awareness of the environmental effects of conventional buildings and changes in government policies throughout the world are the two major reasons behind the large-scale adoption of construction chemicals for buildings. Major players in the construction industry are now paying increased focus on LEED ratings, green points, and sustainable buildings.

Even though the use of these chemicals increases the overall cost of construction, its environmental benefits are far greater. Apart from adding more strength to the buildings, these chemicals bring down the volume of water and cement used in the construction process at an exceptional rate. Another major reason behind the increased adoption of construction chemicals is that it enhances the performance of emerging building technologies like new thermoset hotmelts, structural tapes, and multi-purpose adhesives.

Construction chemicals are one of the best things to be introduced in the building construction industry. Its judicious use is sure to change the face of the global housing market and have a favorable impact on the environment.

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