Specialty Chemicals Market Looks to APAC Region to Supply Raw Materials

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Would you be surprised to know that there probably isn’t a company in the world that doesn’t use specialty chemicals?  Specialty chemicals are used for everything, from ink to food, and even in mining.

Just to give you an idea of how much ground the specialty chemicals market covers, here is a list of the most common uses:

  • Pesticides
  • Engineering Plastics
  • Adhesives and Sealants
  • Industrial and Institutional Cleaners
  • Plastic Additives
  • Food Additives
  • Surfacants
  • Specialty Films
  • Flavors and Fragrances
  • Electronic Chemicals and Materials
  • Water Management Chemicals
  • Catalysts
  • Textile Chemicals
  • Mining Chemicals
  • Pulp and Paper Chemicals
  • Printing Inks
  • Oilfield Chemicals
  • Chemicals for Cosmetics and Toiletries
  • Fuel Additives









        The versatility of products offered in The Global Specialty Chemicals Market is a huge reason why it is expected to post a CAGR of over 5 percent for the 2014-2018 period.  But with a market as versatile as this, why is market growth on the slow side?

One of the major hurdles for the specialty chemical industry is the high cost of raw materials required to manufacture the products. Maufacturers like CIBA Specialty Chemicals, Momentive Specialty Chemicals and Hexion Specialty Chemicals largely depend on a few suppliers for their raw materials.

Moreover, they require high-quality raw materials to produce high-purity chemicals. The high cost of raw materials is a major concern for small and mid-sized chemical companies. Due to the intense price wars in the market, vendors are unable to pass the increased raw material costs to their customers.

Additionally, chemical companies in several regions depend on raw materials being imported from other countries, which expose them to international market risks such as increased prices and uncertainty in the supply of raw materials on a timely basis.

Luckily, sourcing raw materials from the APAC region by chemical companies based in the Western countries is a growing trend. The ongoing debt crisis in Europe has generated uncertainties in the Global Specialty Chemicals market.

Moreover, because of the changing business environment and new regulations being introduced at an uncompromising rate, many chemical companies are adapting to the unstable economic environment by altering their business models. Sourcing raw materials from markets in Asia helps manufacturers to save costs, and at the same time increases their hold in the emerging markets. Chemical companies have begun importing raw materials, which are substantially cheaper, from countries such as India and China. This has helped them to compete on par with other key vendors in the US and Europe.

Furthermore, greater industrial productivity has led to an increase in demand for chemicals in the APAC region as the demand for products that cannot be supplied locally has increased. However, the APAC region houses varying levels of maturity and manufacturers that are encountering problems such as high market entry costs, and lack of infrastructure and local expertise to distribute and sell their products.

To offset this, manufacturers are adopting several measures to penetrate the markets in the APAC region by reducing business complexity and production costs. Many specialty chemical distributors are helping the vendors to market their products to customers and set up sales and distribution channels. Further, the fast-growing economies in the APAC region offer opportunities for the specialty chemical manufacturers to offer a range of products, and value-added services, to meet the growing demands.

For more information, view our 2014-2018 Global Specialty Chemicals Market report.

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