Research Reveals New Challenges Facing Specialty Chemicals

By Chemical Processing Staff

Jul 22, 2019

A new report from Infiniti Research on major roadblocks facing specialty chemical companies highlights the key challenges in the sector and explains how they affect the performance of specialty chemical companies. Although the global specialty chemical market continues to expand, plummeting profitability and rising market competition are affecting the performance of specialty chemical companies, according to Infiniti.

Key challenges facing specialty chemical companies 2019 include:

Changing business portfolios

There is increasing product diversification and rapid merger and acquisition activities taking place in the specialty chemicals sector. Business portfolios are highly dynamic as producers add and dispossess divisions, engage in new market entries and participate in mergers. Moreover, globalization has given rise to business portfolio complexity of specialty chemical companies. 

Dynamic demand patterns

Uncertain and unpredictable demand patterns are now becoming common in the sector. Companies in this sector also have only limited visibility into future customer orders. The growing customer portfolios spanning over several end-use markets and visibility into demand variability represents significant challenges.

Expanding product portfolios

There is increasing product innovation in the specialty chemical sector in order to increase differentiation, strategize new market entry and maximize customer loyalty. New product introductions coupled with frequent adaptation of existing products have resulted in a significant rise in the number of products produced, consequently, leading to greater operational complexity.

Regulation and compliance

Specialty chemicals manufacturers are increasingly facing issues in the documentation of product quality and procedural compliance. These issues are largely driven by government regulations, end-use market requirements, or specific customer requirements.

Increasing customer intimacy

One of the key trends driving companies in the sector is moving closer to their customers by offering them tailored products and customer-specific service arrangements. Although this acts as a source of differentiation for specialty chemical companies, it has resulted in increased complexity of other business operations.

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