Specialty Chemicals Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Specialty Chemicals Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The specialty chemicals market was estimated at around USD 900 billion in 2020, and the market is projected to register a CAGR of over 4% during the forecast period (2021-2026).

The market was negatively impacted by the COVID-19 outbreak in 2020. Owing to pandemic scenario, several countries went into lockdown, which led to supply chain disruptions, work stoppages, and labor shortages. This negatively impacted various industries, like construction, mining, automotive, cosmetics, food and beverages, and other industries. According to OICA, in 2020, the global automotive production in the first quarter was about 17.9 million units, in the second quarter was 31.1 million units and in the third quarter was 52.1 units, declining about 23.1%, 32.4%, and 22.9%, respectively, from the previous year at the same time. The car sales for the first ten months of 2020 in major global car markets of Europe, the United States, Japan, Brazil, India, and China were down by 27.3%, 17%, 14.7%, 30.9%, 24.6%, and 10%, respectively, in comparison to the previous year. Similarly, several industries were severely affected. However, the condition is expected to recover in 2021, thereby driving the market's growth over the forecast period.

Key Highlights

• Over the short term, the major factors driving the growth of the market studied are the robust growth of construction activities, especially in Asia-Pacific and Middle East & Africa.
• On the flip side, increasing environmental regulations, decreasing fossil fuel reserves, and the negative impact of the COVID-19 pandemic are the restraints hampering the growth of the market studied.
• Agrochemicals dominated the specialty chemicals market, and they are expected to grow during the forecast period, which is majorly driven by the increasing population and growth in the demand for food across the world.
• Growing R&D for developing new products is likely to provide an opportunity for the market studied over the forecast period.
• Asia-Pacific dominated the market across the world, owing to the huge customer base, leading to high demand for specialty chemicals, increasing industrial production, and robust growth of the construction sector in the region.

Key Market TrendsAgrochemicals Segment to Dominate the Market Demand

• The agrochemicals segment dominated the share in the specialty chemicals market. The growth of the segment is extensively driven by the decreasing per capita arable land and increasing demand for food across the world.
• The global population is increasing at a rapid rate. This growing population is adding to the food demand. Supplying food to this growing population has become a threat. On the other hand, arable land is declining due to industrialization and urbanization. Fertilizers have been used for a long time to increase the productivity of crops, thus, enhancing the demand for agrochemicals over the forecast period.
• With the increasing per capita income and growing population level, the demand for food crops and cash crops is estimated to increase globally. For instance, as per the FAO, the food demand in the United States is expected to increase by 50-90% by 2050.
• The Food and Agriculture Organization of the United Nations (FAO) and the International Food Policy Research Institute (IFPRI) have published projections of an increase in global food demand out to 2050. The FAO projections indicate that world food demand may increase by 70% by 2050, with much of the projected increase in global food demand expected to come from rising consumer incomes in regions such as Asia-Pacific, Eastern Europe, and Latin America.
• Furthermore, owing to the growing concerns about nutrient efficiency uptake by plants and the growing regulatory health and environmental concerns, micronutrient fertilizers, bio-based fertilizers, and specialty fertilizers (like liquid fertilizers) are gaining popularity.
• Bio-herbicides that use microbes as biological weed control agents are also gaining popularity in integrated pest management techniques, along with synthetic herbicides. Although the segment constitutes only a small part of the industry, it is expected to grow at a significant growth rate.
• Moreover, contracting agricultural land and the loss of crops, owing to the incidence of pests and diseases, are the significant factors driving the market for insecticides.
• Hence, all such favorable trends are expected to drive the demand for the agrochemicals market during the forecast period. This is expected to drive the demand for specialty chemicals.

Asia-Pacific Region to Dominate the Market

• The Asia-Pacific region dominated the specialty chemicals market, and it is likely to retain its position during the forecast period due to robust growth of the construction sector, increasing demand for cosmetic products, growing investment and production in the increasing electrical and electronics industry output, increasing demand for adhesives and plastics from the packaging industry, and increasing installations of water treatment systems from the industries in the region.
• The growing population in the region, especially in countries such as China and India, is increasing the demand for food. This is expected to drive the market for agrochemicals and consequently help the specialty polymers market to grow over the forecast period.
• The growth of the Asia-Pacific construction sector is majorly driven by the expansion of the service sector, leading to an increase in the demand for office spaces, an increase in residential construction projects, and inflow of investments from multi-national companies to set up an industrial base in the region. Such factors are likely to increase the demand for paints and coatings, adhesives and sealants, construction chemicals, and specialty polymers in the region during the forecast period.
• The increase in population in China and India is expected to boost the construction industry. The Chinese government has rolled out massive construction plans, including making provisions for the movement of 250 million people to its new megacities over the next ten years, creating a major scope for the market studied.
• India is also likely to witness an investment of around USD 1.3 trillion in housing over the next seven years, where the country is likely to witness the construction of 60 million new homes. The availability of affordable housing is expected to rise around 70% by 2025 in India. Besides, the Indian government's ‘Housing for All by 2022’ is also a major game-changer for the industry.
• The cosmetic industry is also witnessing strong growth in demand in the region, which is fueled by the increased usage of cosmetic products, due to rising demand for anti-aging cosmetic products from baby boomers and X generation, western culture influence on youth, increased women employment, and continuous innovation of products attracting the masses. This is increasing the cosmetic production in the region, leading to a rise in demand for cosmetic chemicals.
• Hence, all such favorable trends are collectively likely to drive the growth of the specialty chemicals market in the region during the forecast period.

Competitive Landscape

The specialty chemicals market is highly fragmented, with numerous players holding a significant share of the market. Some of the noticeable players in the market include 3M, BASF SE, H.B. Fuller, Huntsman International LLC, and Henkel AG & Co. KGaA, among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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