Speciality Chemicals

The specialty chemicals industry has always been dominated by large players from western economies, with Western Europe and North America as the key producers and consumers for a long time. However, as years passed, traditional and closed economies began opening up to the world, and globalization took place. The trend has proven to be of great advantage for China, which has vastly expanded its manufacturing capacity to fulfill its chemical industry demands. Furthermore, developing economies have to their power several factors, the primary among which are abundant natural resource reserves and the availability of inexpensive labour.These factors have triggered a price war among the leading players in the market and the emerging companies vying for larger shares.

Specialty chemical manufacturers produce smaller quantities in batches compared to commodity chemical manufacturers that produce large amounts in bulk. Specialty chemical manufacturers use the batch process and require a regular change of operating conditions, raw materials, processes/operations, and equipment to cater to the changing customer demands. Besides, constant regulatory changes by agencies such as the FDA, OSHA, HCS, and REACH, among others, keep specialty chemical manufacturers on their toes. Moreover, the prices of raw materials for production have been significantly increasing, further adding to the list of challenges players in the industry face. Overall, rising raw material prices, stiff competition from emerging companies, and stringent regulations are compelling companies to find alternatives to reduce the overall cost of operations.