Specialty Chemicals Market - Forecast(2023 - 2028)
Specialty Chemicals Market is forecast to reach $588.41 billion by 2025, after growing at a CAGR of 5.51% during 2020-2025. The construction industry will boost consumer demand as a result of increased commercial and residential construction projects. Rising urbanization in developing regions has resulted in numerous upcoming housing projects increasing product demand. Further, it enhances the overall market demand.
The “Specialty Chemicals Market Report– Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the Specialty Chemicals Market.
- Asia-Pacific, due to its large customer base, has dominated the world economy, leading to high demand for specialty chemicals, rising industrial production and rapid growth in the region's construction sector.
- Growing R&D is likely to provide an opportunity over the forecast period for the market studied to develop new products.
- Paints and coatings dominated the market for specialty chemicals and are expected to grow over the forecast period, with robust growth in the construction industry, driven largely by growth in residential construction worldwide.
- Increasing construction spending in BRIC nations has a positive impact on the size of the market for construction specialty chemicals and has created new opportunities for business growth.
- In addition, the rising automotive sector in the region, such as China, India and Japan, is the main driver of business growth due to high per capita disposable income and improved customer lifestyle.
Type - Segment Analysis
Food Additives segment held the largest share in the Specialty Chemicals Market. Growing population and need for food which in turn increases the Food additives specialty chemicals. These are used to enhance the foods nutrient content, keep the product fresh and make the food more appealing. Furthermore, it also provides consistent and smooth texture along with maintaining the wholesomeness of food. Increasing living standards accompanied by rising consumer’s disposable income would drive growth for food additives in the next few years.
Application - Segment Analysis
Construction Chemicals sector has been the primary market for Specialty Chemicals by growing at a CAGR of 8.89%. The paints and coatings segment have wide range of applications in this sector, the market is estimated to record significant changes in respective countries. The top countries in the Construction & Infrastructure industry are expected to boom over the next five years. Americas and Europe are estimated to continue to emerge in the global glass landscape. Construction & Infrastructure end user further segmented into retail stores, restaurants and hotels, airports, hospitals, arts and exhibition centers, shopping malls, and others. Airports is the largest segment with the share of 22.7% followed by restaurants and hotels with 21.2%, and retail stores with 20.2%. Increase in spending of commercial construction especially in the developing countries such as China, India, and South Korea, will increase the demand of construct ion chemicals. Commercial construction will continue to grow in the future. With more consumer spending and governmental investments in tourism, office buildings and retail space, commercial construction businesses will reap the rewards.
Geography - Segment Analysis
APAC dominated the Specialty Chemicals Market share with more than 38%, followed by North America and Europe. The economy of APAC is mainly influenced by the economic dynamics of countries such as China and India, but with growing foreign direct investment for economic development of South East Asia, the current scenario is changing. In the developing region such as APAC, the expansion of construction industry contributes into the growth of Specialty chemicals Market. The Asia Pacific construction industry is worth $4.95 trillion (excluding India) and is expected to reach $5.45 trillion by 2021 according to ENG Cranes. The healthy economic growth in APAC had risen the construction activities in the region.
By 2020, one half of global construction spending is expected to come from APAC countries with China, Indonesia, Japan, South Korea, and Malaysia are exhibiting the highest growth potential. India is expected to grow at twice the rate of China over the next decade especially into infrastructure sector where government is investing approximately $376.5 billion over the next three years. Japan’s residential and infrastructure construction accounts for 28 to 33 percent of construction activities. Further, the construction activity is expected to rise in next few years because of upcoming Olympic Games. These factors are likely to increase demand in the region over the forecast period for paints and coatings, adhesives and sealants, construction chemicals, and specialty polymers. Therefore, during the forecast period, all such favourable trends are collectively likely to drive the growth of the region's specialty chemicals market.
Drivers – Specialty Chemicals Market
Development in supply chain management, strategic sourcing, and ecommerce has increased transparency and awareness of the customer. As a result, in some areas the specialty chemicals industry is becoming more commodity-like as companies are selling their goods on cost rather than quality. After imposing price increases to account for higher costs of R&D, energy and raw materials, the specialty chemicals industry is now trying to improve its margins. By becoming more service-oriented, several specialty chemical companies are trying to increase barriers to accessing their markets. They concentrate less on goods and more on customer-specific support services. Most specialties chemicals industries, including automotive coatings, catalytic fluid cracking catalysts, pharmaceutical additives, antioxidants, and water treatment, has long been willing to provide services alongside products.
Challenges – Specialty Chemicals Market
- Stringent Regulations Governing the Specialty Chemicals Market
The majority of specialty chemicals are synthetic, which can adversely effect the environment and therefore effect chemicals of flora and fauna. Because of their toxic nature, environmental protection authorities have placed various environmental restrictions on the use of synthetic chemicals, which can impede the size of the market for specialty chemicals over the timeframe forecast For example, atrazine and acetochlor herbicides have been banned by the European Union. France and Denmark also banned glyphosate for use in lawns and gardens in June 2015.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Specialty Chemicals Market. In 2018, the market of Specialty Chemicals has been consolidated by the top five players accounting for xx% of the share. Major players in the Specialty Chemicals Market are Henkel Ag & Co. KGAA, BASF SE, AkzoNobel N.V., Evonik Industries AG and Clariant AG, Huntsman International LLC, The Dow Chemical Company, Albemarle Corporation, and Ashland Inc. (U.S.), among others.