Speciality chemicals are chemicals produced that give out various effects, on which a lot of industries are dependent on. These are the materials that are used based on how they function. These chemicals are manufactured by an interconnected speciality chemical industry who focus on the function of these chemicals instead of focusing on its composition.
These chemicals are formulations or single chemical entities, where their compositions decide the function of the chemical. A report came out in July 2019, that covers almost 29 speciality chemical segments that are categorised based on the specific industry that uses it as called as market-oriented or function-based where the chemicals provide similar functions.
The market based include chemical or products that are also present in the functional-based since they are used by some similar industry. In the case of function-based chemicals or products, it is not the case since they are used by different markets. This difference is made clear to understand the different strategies based on the product rather than the actual differences in the chemicals.
Based on value, in 2018 China, North America and West Europe were the biggest regions who held the industries biggest shares. The rest share was with Japan and other parts of Asia and in the end a small part for the rest of the world.
In 2018, speciality polymers, industrial cleaners, electric chemicals, flavours and fragrances, that are also known as the fifth-largest segment in speciality chemicals, had over 37% market share while the tenth biggest segment had more than 62% of the share on the market. Keep in mind that each segment in the speciality chemical industry has a sub-segment that includes the products and competition.
During the same year, China was the biggest consumer for some speciality chemical that reached about 30 to 50 per cent of global usage. These speciality chemicals include additives in the form of plastic, circuit boards, construction materials, paper chemicals, rubber, textiles, polymers and much more. China consumption resulted in more than 50% of the value in the textile industry that year.
While North America was leading in the catalyst, biochemicals, food additives, cleaners, oil chemicals, inks & lubricants like sodium amide that is used in the preparation of some dyes. Europe was leading in flavour and nutraceuticals while Japan was leading consumer in imaging chemicals. The rest of Asia was leading in conductor coating chemicals.
Other than this, the industries that were just starting to boom were growing faster than that of these known countries since their growth rates are calculated from a very low base. Even then their consumption rate per person was extremely low compared to these big companies.
Earlier the speciality chemical industry sold most of their products based on their value. Their cost had very less part of the cost structure of their customer’s products. Advancement in eCommerce business has made a lot of customers aware, as a result, the speciality chemical industry has become more of goods focused and they sell their products based on the price rather than how they sold on function and value-based earlier. Now the speciality chemical industry is trying to raise their borders by increasing the prices which will cover the research and development & materials cost.
Some players in the industries are trying to raise the bar by being more service-based than the way they were earlier. The focus has shifted mainly from the product production to providing support for the customer and their satisfaction.
This has been one of the best ways for progress when it comes to providing customer support and services while selling the products as well and industries believe this is the way to increase growth rate in coming years as well.