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The industry of chemicals & materials forms the basis of various industries such as construction, transportation, food and beverages, pharmaceuticals, electronics, healthcare, utilities, and oil & gas. The market consists of a number of components and sub components within its large portfolio. A chemical compound is a distinct substance or compound that is artificially manufactured or purified, whereas a material is a compound from which other complex materials are made. Chemicals, organic and inorganic in nature, form the building blocks of different kinds of materials. Widely used materials include ceramics, adhesives, metals, composites, polymers, and glasses. Chemicals and materials, independently or in combination with each other find a wide range of application across various end-use industries such as automotive, power & energy, agriculture, food & beverages, instrumentation, consumer goods, aerospace & defense, healthcare, and IT. The global chemicals and materials market has wide range of application areas such as dental silica, flow aids, crop protection, animal nutrition, active pharmaceutical ingredients, dietary supplements, preservatives, flame retardants, surface ingredients, and matting agents among others.

Asia Pacific is expected to retain its dominant position in the chemicals & materials market over the forecast period (2016 – 2024), spearheaded by China, India, and Japan due to rampant growth of end-use industries.

Chemicals & Materials Market Outlook – Surge in Electronics and Construction Chemicals Industries Augmenting Market Growth

Increasing demand for electronic devices across the globe, especially in key regions such as North America, Asia Pacific and the Middle East, is driving demand for electronic chemicals. Electronic chemicals such as PCB laminate, silicon wafer, specialty gases, and wet chemicals are widely used in a wide number of electronic applications such as computers, electronic circuit, diodes, capacitors, home appliances, and entertainment systems. Asia Pacific contributes the largest share in electronics market, which is the largest end-user segment for electronic chemicals. Countries in the region that boost market growth include China, Japan, Taiwan, South Korea, and India. However, the markets in North America and Europe are expected to witness slower growth rate over the forecast period.

Construction chemicals are chemicals used to enhance the quality of the structure by providing resistance against dry heat and wet climate, and protection against fire. Population explosion in countries such as India and China, along with rapid economic growth in these countries, has fueled demand for infrastructure and construction, in turn increasing the number of infrastructural development activities. This, in turn, creates a highly conducive environment for growth of the chemicals and materials market. Growing urbanization, lends demand for construction chemicals such as concrete admixtures, adhesives, and sealants, in turn, fueling growth of the chemicals and materials market. North America and Europe markets are expected to witness moderate growth rate, due to stagnant economy of the developed countries. However, the market in the Middle East is expected to witness significant growth due to high investment in infrastructure development and abundant raw materials reserves within the region.

Chemicals & Materials Market Challenges – Reduce Environmental Impact

Effective and eco-friendly mode of waste disposal, adopted by various regions, act as a key challenge for chemicals & materials manufacturing companies. Stringent laws are enforced on the disposal, only after treatment of all wastewater, gases, and semi-solid waste. The Ministry of Environment and Forest (MoEF) of India, on December 23, 2010, implemented water prevention and control pollution act 1974 and air prevention and control pollution act 1981. These impose stringent regulatory framework for manufacturers and end-users regarding production, import, export, and storage of hazardous chemicals & materials. This significantly increases costs associated with production, which in turn affects profitability of manufacturers in this highly competitive market, in turn inhibiting market growth.

Chemicals & Materials Market – Regulatory Scenario:

  • United States Environmental Protection Agency
    • The Frank R. Lautenberg Chemical Safety for the 21st Century Act, on December 17, 2015.
    • The Toxic Substances Control Act (TSCA) Modernization Act of 2015, on June 23, 2015
  • Registration, Evaluation and Authorization and Restriction of Chemicals (REACH) and Classification, Labelling, and Packaging (CPL) regulations
    • Regulations regarding fertilizer production
    • Regulations regarding detergents production
    • Regulation regarding explosive production
    • Regulation regarding drug precursors production
  • Resource Conservation and Recovery Act (RCRA)
    • Chemical Waste Disposal Law Govern by U.S. Environmental Protection Agency
  • Hazardous Materials Transportation Act (U.S., 1975)
    • Material labelling and designations
    • Packaging requirements
    • Procedures and policies
    • Operational rules

Chemicals & Materials Market – Key Global Conferences:

  • Strategic Approach to International Chemicals Management (SAICM)
    • In Dubai, an International conference on chemicals management, held by government, intergovernmental and non-governmental organizations, on February 4 to 6, 2006.
  • Summit Meeting on Chemical Regulations (SMCR) in Asia Pacific, in 2011
    • Transparency in sharing of regulatory updates and enforcement measures, to provide and promote safety and sustainability of chemical industry in the Asia Pacific region.

Key players in the chemicals & materials market include BASF-SE, The Dow Chemical Company, Sinopec, SABIC, ExxonMobil, Formosa Plastics, LyondelBasell Industry, DuPont, Ineos, Bayer, Mitsubishi Chemicals, Royal Dutch Shell, LG Chem Ltd., Braskem, Air liquid, AkzoNobel, The Linde Group, Sumitomo Chemicals, Mitsui Chemicals, Evonik Industries. The chemicals & materials industry is highly fragmented, with a large number of global players and regional players. In the recent past, the market has witnessed a trend of consolidation through strategic mergers and acquisitions. For instance, in March, 2017, the European Union approved the proposed merger of Dow Chemical and DuPont as part of a US$ 62 billion deal. The companies were subsequently segmented into three separate publicly traded companies, which focus on agriculture, material science, and specialty chemicals, respectively.

Key Developments

  1. Key players in the market are involved in various growth strategies such as merger and acquisition, in order to gain competitive edge in the market. For instance, in September 2017, The Dow Chemical Company merged with du Pont de Nemours & Company. The newly formed company was named as DowDuPont with three business sectors namely material and science, agriculture, and specialty products.
  2. Key companies in the market are focused on different business strategies such as partnership and agreement, in order to enhance their global market presence. For instance, in October 2018, BASF and SINOPEC signed a Memorandum of Understanding (MoU) in Beijing, China, which will strengthen their partnership in downstream and upstream chemical production in China.
  3. Key players in the market are involved in various growth strategies such as merger and acquisition, in order to gain competitive edge in the market. For instance, in September 2018, Clariant AG, a Swiss material supplier, and Saibi, a Saudi petrochemical company, merged parts of their businesses to form a new supplier high performance materials.
  4. Key players in the market are involved in various business strategies such as merger and acquisition, in order to strengthen their market position. For instance, in September 2019, INEOS, a U.K.-based chemicals company, acquired entire composites business from Ashland Global Holdings, Inc. Ashland’s composite business will be named as INEOS Composites.
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Research Methodology

Coherent Market Insights followsa comprehensive research methodology focused on providing the most precise market analysis. The company leverages a data triangulation model which helps company to gauge the market dynamics and provide accurate estimates. Key components of the research methodologies followed for all our market reports include:

  • Primary Research (Trade Surveys and Experts Interviews)
  • Desk Research
  • Proprietor Data Analytics Model

In addition to this, Coherent Market Insights has access to a wide range of the regional and global reputed paid data bases, which helps the company to figure out the regional and global market trends and dynamics. The company analyses the industry from the 360 Degree Perspective i.e. from the Supply Side and Demand Side which enables us to provide granular details of the entire ecosystem for each study. Finally, a Top-Down approach and Bottom-Up approach is followed to arrive at ultimate research findings.


Data Triangulation Methodology | Coherent Market Insights

Coherent Market Insights desk research is based on a principle set of research techniques:

  • National level desk research: It Includes research analysis of regional players, regional regulatory bodies, regional trade associations, and regional organization.
  • Multinational level desk research: The research team keeps a track of multinational players, global regulatory bodies, global trade associations, and global organization.

Coherent Market Insights has a large amount of in-house repository of industry database. This is leveraged as a burner for initiating a new research study. Key secondary sources include:

  • Governmental bodies, National and international social welfare institutions, and organizations creating economic policies among others.
  • Trade association, National and international media and trade press.
  • Company Annual reports, SEC filings, Corporate Presentations, press release, news, and specification sheet of manufacturers, system integrators, brick and mortar - distributors and retailers, and third party online commerce players.
  • Scientific journals, and other technical magazines and whitepapers.

Market Analysis | Coherent Market Insights

Preliminary Data Mining

The raw data is obtained through the secondary findings, in house repositories, and trade surveys. It is then filtered to ensure that the relevant information including industry dynamics, trends, and outlook is retained for further research process.

Data Standardization

Holistic approach is used to ensure that the granular and uncommon parameters are taken into consideration to ensure accurate results. The information from the paid databases are further combined to the raw data in order to standardize it.

Coherent Statistical model

We arrive at our final research findings through simulation models. Coherent Data Analytics Model is a statistical tool that helps company to forecast market estimates. Few of the parameters considered as a part of the statistical model include:

  • Micro-economic indicators
  • Macro-economic indicators
  • Environmental indicators
  • Socio-political indicators
  • Technology indicators

Data Processing

Once the findings are derived from the statistical model, large volume of data is process to confirm accurate research results. Data analytics and processing tools are adopted to process large chunk of collected informative data. In case, a client customizes the study during the process, the research finding till then are benchmarked, and the process for new research requirement is initiated again.

Data Validation

This is the most crucial stage of the research process. Primary Interviews are conducted to validate the data and analysis. This helps in achieving the following purposes:

  • It provides first-hand information on the market dynamics, outlook, and growth parameters.
  • Industry experts validates the estimates which helps the company to cement the on-going research study.
  • Primary research includes online surveys, face-to face interviews, and telephonic interviews.

The primary research is conducted with the ecosystem players including, but not limited to:

  • Raw Material Suppliers
  • Manufacturers
  • System Integrators
  • Distributors
  • End-users