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Overview of the Specialty Chemical Products Industry

Special chemical products are produced by a complex and interrelated industry. In the strictest sense, specialty chemicals are products that are sold according to their performance or function rather than composition. They can be a single chemical entity or formulation whose composition can seriously affect the performance and handling of the customer’s products. This report covers 28 categories of special chemicals, including market-oriented products (for specific industries or markets, such as electronic chemicals or oilfield chemicals) or functional products (product groups with the same functions, such as adhesives, antioxidants or biocides). There is considerable overlap in this characterization method. Market oriented groups usually include many functional chemicals used in the same market, while functional chemicals are usually used in several different markets. This difference is to facilitate discussion of the strategic aspects of the business unit, not because of the actual differences between products.

The following pie chart shows the market share of specialty chemical products by major regions in 2020, calculated by value:

By 2020, the market share of the world’s five major specialty chemical products – specialty polymers, electronic chemicals, industrial and institutional cleaners, surfactants, spices and fragrances – will reach 38%. Each special chemicals business department includes several sub departments, and each department has a personalized product, market and competitive profile.

The Chinese mainland is the largest consumer of the following special chemicals: antioxidants, catalysts, building, feed additives, printed circuit boards and semiconductor packaging, plastic additives, paper chemicals, rubber processing chemicals, special coatings, special polymers, textile chemicals and water management chemicals.

North America is a leading consumer of biopesticides, corrosion inhibitors, cosmetic chemicals, food additives, industrial and institutional cleaners, lubricant additives, oilfield chemicals, printing inks, surfactants and synthetic lubricants. Western Europe is a major consumer of nutritional medicines and flavors and fragrances. The rest of Asia has the highest consumption value of chemicals used in semiconductor manufacturing.

In the past, specialty chemicals companies sold their products by value. Their products account for only a small part of the customer’s product cost structure. Advances in supply chain management, strategic procurement and e-commerce have increased transparency and customer awareness. As a result, in some areas, the specialty chemical industry is becoming more and more like a commodity, because some companies sell certain products at price rather than performance. At present, the special chemical products industry is trying to make up for the rising costs of R & D, energy and raw materials by raising prices, so as to improve profit margins.

Some specialty chemicals companies are trying to raise the entry threshold by being more service-oriented. They are more focused on support services and specific customers than on products. For a long time, in some special chemical industries such as automotive coatings, fluid catalytic cracking catalyst, pharmaceutical raw materials and water treatment, providing products and services has been the way of business. However, as more industries face the problems of slowing growth and commercialization encroachment, more specialized chemical companies have increased the service part of their business portfolio.

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