Specialty Chemical & its impact in Chemical Industry

What is Speciality Chemical? Speciality chemicals (also called specialties or effect chemicals) are particular chemical products which provide wide variety of effects on which many other industry sectors rely. These specialty chemicals are produced by a complex, interlinked industry. If you want to know it in the strictest way, specialty chemicals are chemical products that are sold on the basis of their performance or function and not on the basis of their composition. As far as their formulation is concerned, they can be single-chemical entities or formulations (combinations of several chemicals) whose composition sharply influences the performance and processing of the customer product.

Its Journey The specialty chemicals industry is constantly in the non-static phase. It has evolved a lot since its beginning and is growing with each passing day. North American, Western European, and Japanese firms were the pioneer of this industry. With the advent of liberalization, this industry started moving its base towards Middle East as cheap petrochemical feedstocks was available here. The spread of process technology and the rapid growth of asian economies has enabled many entrepreneurs to set up a speciality chemical manufacturing unit. With more and more manufacturing units being set up, this industry has grown in leaps and bounds across the globe. With the passage of time Chinese and Indian speciality chemical manufacturers have become the key players in this industry. Since when China has shifted its focus from exports to meeting its domestic needs, it has lost its position as the low-cost producer. With technological advancements competition has increased giving rise to commoditized products. During the last 10 years, the specialty chemical industry has witnessed a slower growth giving lesser profitability margin to the manufacturer. Due to the global recession, consumption of speciality chemicals has experienced a drastic fall. The growth in the consumption rate started from 2013-2014 and is going steady at the moment.

Present Scenario As the case with every other thing, Speciality chemical industry also has to go for constant advancements and innovations in order to grow. This industry has come up with the decision of increasing the product's price to tackle the high R&D and raw material costs. Manufacturers are also cutting costs and developing new products in order to meet their financial goals. According to a rough estimate, during 2014-19, volume consumption of specialty chemicals is expected to increase at around 4% globally. With the developed nations like North America, Western Europe, and Japan will grow more slowly at about 2% per year, China and India are going to grow at the highest rates. Developed nations are witnessing a slower growth on account of their debt, adverse demographic factors, and tighter fiscal policies. Asia, especially China and India will witness the highest growth in the coming years. Being the emerging markets for speciality chemical, Asia offers more dynamic prospects because of rising consumer-driven economies and industrialization. Since all the manufacturers are destined to offer the best products and services, innovation is one of the few sources of competitive advantage.

As said earlier, Asia emerging as one of the most sought after destination for manufacturing of Speciality Chemical, many firms such as Amritlal Chemaux Ltd, Tatvachintan Pharmachem Pvt. Ltd, Auxichem, Brisk Chemical Industries have set up their manufacturing unit in India. These firms are manufacturers, suppliers and exporters of speciality chemicals. India stands out among others as far as demography and availability of technical manpower is concerned. Specialty chemical industry like pharma stands out to gain rich dividend from this. The critical success factor for the industry is its capability to provide products at a favourable price performance ratio. Specialty chemicals industry is not all about economies of scale, but economies of scope as same product can be used for multiple applications. The scope is vast, limited only by one's imagination. Companies can use specialty chemicals to develop new products to give them competitive edge in the market place. So take a plunge in this huge market and reap the dividends from this opportunity.

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