A unique set of challenges and opportunities surround the specialty chemicals industry. It is no longer enough to produce chemicals that meet functional requirements. Keeping up with specialty chemicals is essential, and investing in new methods for integrating sustainable inputs into the production process as soon as possible will be beneficial.
Fremont, CA: A unique set of challenges and opportunities surround the specialty chemicals industry. It is no longer enough to produce chemicals that meet functional requirements. Producing specialty chemicals requires producers to drive or at least keep up with industry trends to remain competitive. Specialty chemicals are also highly sensitive to global events. The strength of the dollar, Brexit, and stagnant economic growth heavily impacted the industry's health in 2016. The following are some of the top trends currently affecting the specialty chemical industry:
1. There is Growth in the Specialty chemicals sector
A growing demand for specialty chemicals continues to benefit many producers. In response to growing volumes, customers usually expect lower prices, which in turn drive producers to find cheaper, more efficient methods of production. Energy products and industrial inputs for specialty chemicals manufacturers have become more affordable in recent years. Innovating and improving production processes will be required to reduce the remaining costs.
2. Streamlining the business portfolio
Companies in the specialty chemicals industry are focusing on a specific product line due to growing demand and competition from low cost competitors. In the past, a company could use the strength of its specialized product to drive demand for related products. Thus, the company could produce, market, and sell numerous products at the same time while increasing sales and profits. As low-cost suppliers enter the market and increase their efficiency in providing these products, multi-product companies are beginning to re-strategize and channel their resources towards products where they have the greatest competitive advantage. Increasingly, the competitive edge depends on the quality and performance of its product, as well as the efficiency of your production process.
3. Leveraging new technologies
Another trend in the industry is that open innovation models are increasingly being adopted by companies to gain faster access to new technologies.
Specialty chemical companies have long believed that they needed to develop their technologies in-house, but are now learning that leveraging technology from innovative newcomers can significantly help them achieve their internal objectives of lowering costs and deploying more efficient production processes. Technology developers, for example, are lowering the thresholds and risks of introducing new technologies by assisting producers in the feasibility and pilot scale testing phases.
4. Sustainable chemical processes
Specialty chemicals are no exception to the trend of going green in most industries today. A majority of specialty chemical manufacturers are currently implementing sustainable initiatives. In addition to bio-alternatives and readily available chemicals, crystallization is an energy-efficient and selective method of separation. There is an increasing demand for green or bio-based chemicals, and bio-based chemical manufacturers compete directly with fossil-based chemical manufacturers. Look at the cosmetics industry and how demand for cruelty-free skin care products has skyrocketed. Keeping up with specialty chemicals is essential, and investing in new methods for integrating sustainable inputs into the production process as soon as possible will be beneficial.
