Speciality chemicals are often customised offerings, based on intimate understanding of customer needs and problems. By definition, they represent niches – that ideally should have higher margins, and be less exposed to commodity cycles by virtue of being further down the value-addition chain.
The business of speciality chemicals is more about customer servicing, than efficient manufacturing. While capital costs for plants producing speciality chemicals are smaller, the business requires significant spend in application development and in R&D to stay relevant. Products are sold on the basis of what they do in the intended application, rather than on the basis of their chemical identity. Companies often take strong intellectual property positions – patenting formulations and registering tradenames.
Conventional wisdom has it that the business of speciality chemicals enjoys better margins than commodity chemicals. But that is not always true – and the ground realities depend on many factors, including the nature of the speciality, the competition, the technological complexity, and timing. In many speciality chemical sectors – colorants, come immediately to mind – low entry barriers has led to a flood of capacity, especially from emerging markets, leading to a rapid commoditisation of the business and erosion of margins for all. In colorants, this has gone to the point where almost the entire business space has been vacated by western producers and is now dominated by producers in Asia, especially India and China. Even a seeming lucrative business such as manufacture of active pharmaceutical ingredients (APIs) is under threat, again due the emergence of hundreds of producers in Asia.
The only way out for speciality chemical producers is to innovate and, where required, churn the portfolio. This is particularly evident in the business of fine chemicals – low-volume chemicals, made in batch plants, but sold on chemical specifications.
The different sections of this publications are dedicated to the different types of speciality chemicals including Acrylate monomers, Aniline, Ethylene oxide, Fatty alcohols, Oxo-alcohols, Phenol: An Assessment of Indian Markets and Toluene. It explores the nature, market - Global and Indian and the industrial uses of these speciality chemicals.
Hard copy editions of this publication are also available.