“The efforts on industrial diversification initiated by the local governments along with expansions in the regional manufacturing sector in Middle East and Africa will drive the market for specialty chemicals during the forecast period.”
The research study covers the present scenario and growth prospects of the global specialty chemicals market for 2016-2020. The report details the prime drivers influencing the market growth and the challenges faced by the vendors and the market. The report also presents the vendor landscape and corresponding detailed profiles of the five prominent vendors operating in the market.
According to Swapnil Tejveer Sharma, a lead analyst at Technavio for specialty chemicals research, “The efforts on industrial diversification initiated by the local governments along with expansions in the regional manufacturing sector in Middle East and Africa will drive the market for specialty chemicals during the forecast period.”
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Technavio chemicals and materials analysts highlight the following three factors that are contributing to the growth of the global specialty chemicals market:
- Growing demand for food grains
- Rapid urbanization in BRICS
- Reduced production cost for end markets
Growing demand for food grains
The global demand for food grains has increased gradually with close to 2.8 billion metric tons being produced in 2015. Governments are also taking initiatives to implement new policies to meet the growing demand for food products due to the increase in population. Owing to the rise in the disposable income of consumers, especially in the developing countries in APAC, the wastage of food products is increasing. For instance, an estimated 30lbs or more of food is wasted per year per person in APAC.
Given the limited arable land, it is imperative to improve agricultural yield at a rapid pace to meet food sufficiency targets. Globally, herbicides constitute the largest share of the agrochemicals market, accounting for approximately 48% of the total consumption.
“The market is driven by the increasing efforts on the production of high-value crops, including horticultural crops, where the use of these chemicals is essential to prevent loss,” says Swapnil.
Rapid urbanization in Brazil, Russia, India, China, and South Africa (BRICS)
The end markets for specialty chemicals are closely linked to each other and often have an impact on adjoining markets. For example, construction, healthcare, electronics, and automotive markets have a direct effect on metals, energy, and polymers markets.
The customer preference in these end markets have witnessed significant shifts, with the growing demand and emphasis on sustainable products, processes, and practices. With rapid urbanization in BRICS, the need to factor in sustainable protocols across business functions will drive the growth of the global specialty chemicals market.
Reduced production cost for end markets
Specialty chemicals and materials play a crucial role in reducing production costs for end-market producers by minimizing wastage and maintenance costs. For instance, lubricant and oilfield chemicals reduce waste generation during drilling and clean the grime associated with oilfield equipment cost-effectively.
Manufacturers of specialty chemicals and materials also try to deliver durable and economical alternatives such as composites used in the transportation industry. This helps in minimizing the machining costs due to the flexibility in their design and better strength properties. Manufacturers are also planning to decrease the logistics cost by offering lightweight substitutes that also provide a compounding effect in reducing handling and shipping costs across the supply chain.
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