As per Wantstats analysis, the global specialty chemicals market is operating at maturity phase of its life cycle and is expected to gather steady growth over the assessment period. The global market portrayed massive numbers both in terms of productions as well as consumption and is likely to expand at CAGR of 6.44% (in value terms). The growth of this market is majorly depends on the leading end-use industries such as construction, agriculture, polymer, electronics & electrical, automotive, and other industries.
Most of the players operating in this market are leaders in the chemical industry, which are dominating the global market with their vast product portfolio and aggressive marketing strategies. These players are Solvay SA, Akzo Nobel NV, Lenzing AG, BHS Specialty Chemicals, Givaudan, Evonik Industries AG, ESource: Indian Specialty Chemical Manufacturers’ Association, SOCMA, FRED Economic Data, World Bank, Press Releases, Journals, Annual Reports, Whitepapers, Company Websites, Factiva, Bloomberg, and Wantstats Analysison Mobil Corporation, BASG SE, Lanxess AG, and others. Apart from these established industry participants, specialty chemicals market comprises of large numbers of tier 2 and tier 3 market players. Industry rivalry is high among the above mentioned players and is expected to get even higher with the acceptance of biobased products, which is driven by rising global green awareness. Changing industry dynamics, such as the emergence of electric vehicles linked with demand for lightweight vehicles, heavy investment in the construction industry as a result of favorable government policies, and consistent fluctuations in crude oil prices, have led to collective approaches from the market players. This has led market players to adopt various growth driven strategies such as capacity expansion, merger & acquisition, product launch, and agreement to exploit global demand for specialty chemicals.
It can be concluded that during the coming years, the market is likely experience an intensifying global competition among the industry leaders.
The global chemical industry is transforming from commodity chemicals to specialty chemicals. This has given rise to a huge investment in specialty chemicals with various inorganic growth activities such as mergers and acquisitions during the last three financial years.
Product Launch
Month & Year
Description
February, 2020
Henkel Adhesive Technologies India (subsidiary of Henkel) made an investment of EUR 50 Million in the new production unit in Kurkumbh, Maharashtra to fulfill the demand of high-performance adhesives, sealants and surface treatment products.
October 2019
Clariant announced the creation of a new brand of patent protected oxygen scavenger additive masterbatches – CESA ProTect. The primary market for the new product is monolayer polyethylene terephthalate (PET) packaging.
April, 2018
The company launched a new product in its beauty care segment. Vetivyne™ is a new cosmetic active offering powerful beauty benefits with both anti-aging benefits and long-lasting properties. Givaudan has expanded its wide beauty product portfolio, with the asddition of newly launched Vetivyne™.
April, 2018
BASF’s color & effects bards have launched pioneering stir-in pigments for automotive coatings. eXpand!™ Red is a newly launched pigments, which are accountable to provide enhanced color depth, flop, and sparkle to automotive parts. It is the first pigment to result from the strategic partnership between BASF and Landa Labs that was established last year
April, 2017
Ashland Inc introduced three new product offering to the personal care industry, which is going to add significant value to hair face and body products. FiberHance™ bm, Antaron ™, Harmoniance™ were three newly launched products and added value to the personal care product segment.
Acquisition
Month & Year
Description
December, 2019
Lanxess AG acquired Itibanyl Produtos Especiais Ltda. (IPEL), a Brazilian Biocide company. This acquisition strengthens the company specialty chemical business in the industry.
December 2019
Givaudan announced the acquisition of the cosmetics business of Indena. The two companies also intend to conclude a long-term partnership agreement under which Indena will continue to manufacture ingredients and provide other services for Givaudan.
May 2019
Givaudan completed the acquisition of Albert Vieille, a French company specializing in the manufacture of natural ingredients used in the fragrance and aromatherapy industry.
February, 2018
Lanxess AG acquired Solvay’s phosphorous additive business with USD 78 million. Belgium based Solvay additive business was acquired, which includes six production facilities of phosphorous additives. The acquisition is another consistent step in the Group’s growth strategy with a focus on mid-sized markets and North America and Asia Europe.
February, 2018
Croda acquired Finish Technology Company, supplier of electrostatic protection products, based in Tampere, Finland. Further details of this acquisition are not revealed by both of these companies. This acquisition would complement Croda’s paints & coatings product segment.
October 2017
H.B. Fuller announced the completion of acquisition of Royal Adhesives & Sealants at a price of USD 1.6 billion. This acquisition accelerated its business strategy and positioned it to exceed its 2020 targets.
October, 2017
BASF signed an agreement to acquire selected parts of Bayers seed and non-selective herbicides business. This activity is undertaken by spending USD 6.97 billion. This acquisition includes Bayer’s global glufosinate-ammonium non-selective herbicide business, which is commercialized under the Liberty®, Basta® and Finale® brands, as well as its seed businesses for key row crops in selected markets
August, 2017
Exxon Mobil Corporation acquired world’s largest aromatics plant, i.e. Jurongs aromatics plant. The details of this transaction are yet to disclose. The acquired production facility is capable of producing 1.9 million tons of ethylene, which would complement Exxon Mobiles olefin production capacity.
August, 2017
Exxon Mobiles completed acquisition of Lion Copolymer Services facility and spent USD 5.6 million. As per one of the board member of the ExxonMobil, the plant will be functional post-2020 and produce synthetic rubber..
July, 2017
The company acquired the U.K-based Flexcrete Technologies Ltd and an agreement to acquire French manufacturer Disa Technology. AkzoNobel undertook this double acquisition to strengthen global position in the performance coatings
March, 2017
Ashland Inc acquired Pharmachem Laboratories and spent USD 660 million for this transition. Pharmachem Laboratories is a leading international provider of ingredients to the global health and wellness industries and products to fragrances and flavor houses. This acquisition is expected to complement Ashland’s earning per share gradually in the years to come.
March, 2017
Henkel acquired professional hair business in Mexico, and the U.S. Henkel signed an agreement to acquire Nattura Laboratorios, S.A. de C.V. and widen hair care product portfolio. This acquisition is part of Henkel’s organizational strategic to strengthen its presence in attractive markets.
May, 2016
Evonik Industries acquired Air Products specialty & coatings additive business and spent USD 3.8 billion to undertake this activity. As per our analysis, this acquisition was made to strengthen and to complement Evonik Industries' specialty chemical business.
March, 2015
Solvay has made strategic surfactants investment in the acquisition of large-scale alkoxylation plant in the Netherlands. The company collaborated with Emery Oleochemical and ERCA Group to jointly own new alkoxylation facility, ERCA Emery Surfactant B.V., in the Moerdijk integrated industrial park in the Netherlands
December, 2014
Solvay entered personal care market through the acquisition of Dhaymers in Brazil. Dhaymers is a Brazilian ester manufacturer and a popular name in the skincare industry. Solvay acquired Dhaymers to expand its presence in the Latin American region, specifically, in skin care industry.
June, 2014
Henkel acquired three hair care brands in North America as a part of their expansion plan. This acquisition is made by signing an agreement with San Francisco-based TSG Consumer Partners that would add three big hair care brands to Henkel’s product portfolio. The company has spent USD 367 million to acquire these hair care brands.
Expansion
Key Development Analysis
Month & Year
Description
February, 2020
Henkel expanded beauty care unit in Russia with an investment of EUR 20 Million. The expansion helped company to increase the capacity of finished products by 300 million units per year.
August 2019
Clariant announced its plan to expand the capacity of its catalysts production facility in Panjin, Liaoning province, Northeast China. The expansion involves the optimization of the existing facility and enable the creation of a new state-of-the-art production line for SynDane maleic anhydride (MA) catalyst.
May, 2019
Lanxess AG expanded Macrolex dyes plant capacity at Chempark Leverkusen, Germany with an investment of EUR 5 million. This expansion increases the capacity by 25% and expected to meet the demand for high-quality dyes across the global.
July, 2018
Solvay expanded production facility of aerospace composites at Greenville, Texas. The expansion increases facility resin mixing capacity to fulfil the growing demand of military and aerospace composite.
April, 2018
Evonik Industries made a single-digit investment in its specialty methacrylate plant in the U.S. This activity has been undertaken to expand production capacity for VISIOMER® CROSSLINKERS. Capacity expansion would help Evonik industries to cater increasing demand from countries such as China and India in Coatings and plastics applications.
November, 2017
DowDuPont expanded high-performance polyimide resin production in its Belgium based production plant. This expansion activity has been undertaken due to high demand for high-performance polyamide resin from the prime market including automotive, electronics and consumer’s electronics.
November, 2017
AkzoNobel expanded surface chemistry plant in China. The company invested overall USD 5.72 million in China by addressing demand from Asia Pacific region. This investment is specifically directed to widen regional product portfolio in the surface treatment plant
August, 2017
Lenzing AG to establish a subsidiary in Thailand to set up a manufacturing plant for lyocell fiber. This plant is being constructed by collaborating with Heiligenkreuz and is expected to be functional by 2020
September, 2017 announced the expansion plan for the next two years. As per the proposed plan, the company would be spending USD 100 million on the production capacity expansion of specialty plastic material in Texas.
May, 2017
Exxon Mobil completes huge plastic capacity expansion in near Houston. It has done multi-billion investment in this capacity expansion and added 1.3 million metric ton annual polyethylene capacity. The plastic is created in the form of a tiny plastic ball, which is to be shipped overseas to meet rapidly growing demand.
March, 2017
The company completed construction of world-class ethylene production plant in Texas. This expansion is a part of company’s long-term growth expansion plan; wherein, they would be producing ethylene with capacity of 1.5 million tons/year in the Texas-based plant.
February, 2017
Croda International invested USD 33 million in the U.K and extended polymer capacity. This fund investment is made to cater increasing demand for polymer additives in one of their most attractive markets. This increased capacity would combine cutting-edge technology with optimized production and process efficiencies to ensure that it continues to supply the highest performing and most innovative products.
May, 2017
Lanxess AG completed the construction of flame retardant production plant. The production capacity of Emerald Innovation’s 3000 SA flame retardant is expanded up to 14,000 tons per year.
December, 2016
Lenzing announced to spend USD 300 million for capacity expansion. The detail of this expansion is not revealed by the company. As per the board’s members of the Lenzing, this expansion would be scheduled in 2019
January, 2016
Lanxess AG completed capacity expansion of high-performance plastic in the U.S. The company invested USD 15 million in this capacity expansion. Lanxess expanded the high-performance plastic capacity due to trend for fuel-efficient automotive in the automotive industry.
February, 2015
Ashland invested USD 89 million in the production capacity expansion of specialty chemicals in Virginia. This investment is directed to expand two product lines - Natrosol hydroxyethylcellulose and Klucel hydroxypropyl cellulose used in paints and pharmaceuticals markets
Agreement
Month & Year
Description
December 2019
Givaudan announced the acquisition of the cosmetics business of Indena. The two companies also intend to conclude a long-term partnership agreement under which Indena will continue to manufacture ingredients and provide other services for Givaudan.
August, 2019
BASF, Solvay and Domo Chemicals completed the agreement of Polyamide business. The agreement helped Domo to Acquire Solvay PA6,6 business in Europe.
May, 2019
Solvay and Safran had announced long term supply agreement for high temperature composites and adhesives. This agreement helped Safran to use material for engine components.
December 2018
Clariant announced an exclusive cooperation agreement with Eastman Chemical Company, for the distribution of Eastman’s Tamisolve NxG solvent, an innovative, low-tox, and highly effective solvent for the agrochemical industry.
September, 2018
Exxon Mobil signed an agreement with Guangdong Provincial People’s Government, China for building chemical complex which was expected to meet the growing demand of specialty chemicals in China.
April, 2018
AkzoNobel specialty chemicals signed a co-operation agreement with INEOS Nitriles to expand chelates production. Both of the companies bound in a long-term agreement, which would allow AkzoNobel to expand its production of biodegradable chelates, used in detergents and other industries. This strategic move is expected to complement company’s specialty chemicals business over the coming years.
March, 2018
Evonik industries and SEHE Consulting Ltd together announced sales agency contract. As per the agreement, Seher Consulting would market VESTAMID® NRG Polyamide 12 product line used in oil and gas applications. Saher Consulting is based in Canada and is expected to give better exposure to Evonik's abovementioned product line in the North American region.
December, 2017
ASF SE and Sinopec together formed equivalent joint venture to expand production capacity of Neopentylglycol. After forming 50:50 joint venture, they have expanded desired production capacity of Neopentylglycol by 40,000 metric tons in China
December, 2017
Givaudan entered into negotiation agreement to acquire Expression Perfumes. As a part of long-term expansion activity. The company is looking to strengthen its access to local and regional customers in fragrances segment. Therefore, they are looking to acquire Expression Perfumes.
June, 2016
Amyris and Givaudan formed a strategic partnership for the production of active cosmetics ingredients. Givaudan has undertaken this partnership to enter into the cosmetics industry with bioscience player Amyris.
Threat of New Entrants
Considering the past and present global specialty chemical market scenario, the target market is estimated to have medium threat of new entrants, owing to the high capital intensive nature of the industry and high cost of raw materials. However, over the forecast period, the demand for specialty chemical is expected to grow in water treatment, construction and bio-based segments due to a wide variety of end uses. This in turn will lead to supply deficit in future. Thus, in future it is anticipated that new entrants might enter into the specialty chemical market owing to the foreseen demand from the latter.
Threat of Rivalry
The specialty chemical market is likely to witness low to moderate threat of rivalry, as the market is segmented in significant number of Tier 1 manufacturers and small yet impactful medium-scale manufacturers from Asia Pacific region. Additionally, there is a low rivalry observed among the existing players, mainly due to established consumer base in each region with efficient distribution network to cater to the demand of end users. Moreover, the competition in this market is mostly based on the quality and price of the coating.
Threat of Substitute
Threat of substitutes for specialty chemical in the market is anticipated to be low in the current scenario. Currently, there are no potential specialty chemical substitutes available in the global market which serves the purpose of these specialty chemicals in the end user industries without jeopardizing its performance. However, some companies are involved in constant development of specialty chemicals and high performance substitutes for its use in agrochemical, flavor and fragrance, and water treatment segment. Thus, over time, and with the ongoing research and development, substitutes for specialty chemical in the world is expected to emerge.
Bargaining Power of Supplier
The bargaining power of supplier is estimated to be medium, although there are more number of suppliers present in the market. The reason for medium bargaining power of supplier is that, there is no other potential alternative present in the global market for specialty chemicals based on the corresponding functional applications. The prices for synthetic and natural based chemicals that are used as feedstock in manufacturing of specialty chemicals, varies sharply which could impact margins for manufacturers and suppliers adversely is also the reason that the bargaining power is medium among them.
Additionally, there is no other potential alternative present in the global market for buyers to switch and hence the bargaining power of the supplier is estimated to be medium.
Bargaining Power of Buyer
The bargaining power of a buyer is estimated to be low as there are few choices available for the buyer to switch. Also, buyers in the specialty chemical market are more price sensitive as most of the end user applications are in agrochemicals, water treatment chemicals, construction chemicals, surfactants and dyes & pigments among others.
