The specialty chemicals industry operates within a unique space with exciting opportunities as well as an increasing number of challenges.Producing chemicals that meet functionalperformance is no longer enough. To remain competitive in the specialty chemicals space, producers need to drive or at least keep up with the trends in their industry. The specialty chemicals space is also highly sensitive to global events. A strong dollar, Brexit, and stagnant economic growth heavily impacted the health of the industry in 2016, and those are only examples.
Amongst the top trends that are currently influencing the specialty chemical industry, we would like to briefly discuss those that have an impact on your choice of chemical production process.
1. There is Growth in the Specialty chemicals sector
Quite a number of specialty chemicals producers continue to benefit from a growing demand. With growing volumes, customers normally expect lower prices, which in turn drives producers to find cheaper and more efficient production methods. In recent years, specialty chemicals manufacturers received a helping hand from more affordable energy products as well as industrial inputs for their manufacturing processes. The remainder of the cost reductions will need to come from innovative and more efficient production processes.
“More companies in the specialty chemicals industry are beginning to streamline
their business portfolio towards focusing on a specific product line”
2. Streamlining the business portfolio
Are you used to getting your feet wet in many different products? As a result of the growing demand and increasing competition from low cost competitors, companies in the specialty chemicals industry are moving towards focusing on a specific product line. In the past, a company could use the strength of its specialized product to drive demand towards other product lines that were similar in function and/or production process. The company could therefore produce, market and sell several products at the same time while enjoying increased sales and profits. However, as other low-cost suppliers have entered the market and have begun to supply these products with increased efficiency, the multi-product companies are beginning to re-strategize and channel resources towards those products where their competitive advantage is highest. The performance and quality of the product as well as the efficiency of the production process are key elements of your competitive advantage, now more than ever.
“Going green is the top trend in most industries today, and the specialty chemical industry is no different”
3. Leveraging new technologies
Another top trend in the industry is that companies are increasingly adopting open innovation models to get faster access to technology improvements. Companies within the specialty chemical space have long believed that they needed to develop their technologies in-house, but have now come to realize that leveraging of technologies from innovative newcomers can significantly help them realize their internal objectives of lowering cost and deploying more efficient production processes. For example, technology developers are lowering the thresholds and risks of introducing new technologies by assisting producers right from the basic feasibility and pilot scale testing phases when introducing innovative production processes.
4. Sustainable chemical processes
Going green is a very important trend in most industries today, and the specialty chemicals industry is no different. In fact, over 2/3 of specialty chemicals manufactures are currently implementing sustainable initiatives. Common practices include using bio-alternatives, readily available chemical substances and more selective and energy efficient separation methods such as crystallization. Today, the demand for green or bio-based chemicals is increasing, and bio-based chemical manufacturers directly compete with their fossil-based predecessors. Just look at the cosmetics industry and how cruelty-free skin care products have sky-rocketed in demand. Specialty chemicals are steadily headed in the same direction, so don’t get left behind. The sooner you invest in new methods of better integrating sustainable inputs into the production process, the better!
Which of these trends will have most effect on your company and its production processes ? Let us know by leaving a comment below!
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