Specialty Chemicals Market Analysis

In-depth Analysis of Specialty Chemicals Market Industry Landscape

The global chemical industry has been through a period of dramatic changes over the last one and a half decade and is witnessing a gradual shift from commodity chemical to specialty chemical. Specialty chemical is a group of relatively high value, low volume chemicals known for their end use applications. On the other hand, commodity chemicals are recognized for what they do and not for what they are. Specialty chemical offers a required solution to meet consumer demand, and it is a highly knowledge driven industry with a raw material cost lower than commodity chemicals. Thus, the chemical industry is witnessing a gradual shift from commodity chemicals to specialty chemicals. Moreover, stringent environmental regulation on the petrol based products is adding fuel to this transition. Due to the environmental hazards associated with petrol based products, governmental regulatory bodies have restricted the use of petroleum production by regulating environmental policies, and its impact has largely seen on industrial competency.

The global chemical industry has seen major mergers and acquisitions activities during 2015-2016, in terms of some mega transitions. As the industry is steadily heading towards maturity phase in its life cycle, key industry leaders are trying to focus on high-value specialty business. In Europe, for instance, Solvay has upgraded its specialty material portfolio by acquiring the U.S. based firm, Cytec at USD 6.4 billion. It has also acquired the U.K based supplier of advance based surface treatment plating chemicals and electronic material (Alent Plc) to strengthen their position as specialty chemical company. A similar trend has witnessed in Japan as well, Mitsubishi Chemicals is shifting their focus from commodity to specialty chemical with the divestment of ethylene crackers and investment in growing business. These businesses include carbon fiber and composites, LED lighting, and next-generation businesses- organic photovoltaic molecules and organic photo semiconductors.

One of the most suitable examples of this shifting trend is Dow and DuPont’s recent announcement of the merger and key focus on three major specialty business unit. As per the industry experts, this is the one of the biggest mergers happened to the chemical industry and has availed huge benefits to specialty chemicals. There has been a consistent rise in the demand for specialty chemical products with this shift and is emerged as one of the strongest drivers in specialty chemical market