What Is Driving the Development of Specialty Chemicals?
- August 13, 2024
- Blog
As a global market that is projected to be pushing $1 trillion by 2030, specialty chemicals are undeniably on the rise. These molecules and formulations are distinguished from traditional or commodity chemicals by their specific uses, being employed in everything from seat belts to astronaut cameras, from makeup to medicine.
As we take a look at what’s behind this category’s rapid growth, remember that Seatex’s diverse manufacturing capabilities and technology solutions make us the perfect partner for chemical developers.
By partnering with us, you can take advantage of these underlying factors that are creating demand for makers of high-performing specialty chemicals…
Consumer Habits
Modern consumers are more attuned than ever to the impact of their purchases on their health and the health of the environment at large. In spite of some of the recent economic headwinds, the trillion-dollar market is cranking along as strongly as ever.
This trend comprises typical consumer items like health and beauty, household cleaner, and food products made without petrochemicals, but also extends into products that may be used by either consumers or manufacturers/business, such as water treatment chemicals, the CASE group (coatings, adhesives, sealants, and elastomers), and automotive chemicals.
The CASE market alone was valued at a whopping $641 billion in 2023, led by coatings, with increased consumer demand for germ protection in the wake of the COVID era driving innovation in antimicrobial coatings and nanocoatings. Likewise, the growth in bio-based coatings made from renewable sources like sugar beet pulp, corn, and soybeans reflect consumers’ desire for more varied, better-performing print inks, wood coatings, polyurethanes, and more (more on this below).
Regulatory Factors
Typically, government regulation is considered a detriment to innovation, driving operational costs higher and leaving less capital for new product development. This seems to be the case for most chemical manufacturers, many of whom reported in a survey by the American Chemistry Council that they would “decrease investment in R&D, new technologies, and new products” in the event of sudden, permanent increases to regulatory compliance costs.
Nevertheless, specialty chemicals are sometimes the result of new federal, state, or even local regulations pertaining to a traditional chemical’s environmental impact, transportation, permitting, disposal, or other aspect. For example, increased pressure on VOCs (volatile organic compounds) and HAPs (hazardous air pollutants) in solvent-based coatings has led to wider availability of water-based options with similar performance.
Nematicides are another class of chemicals that have been forced to evolve due to regulatory clamp-downs in recent years, with most traditional fumigant and non-fumigant versions being banned or phased out. We’re now seeing new alternatives take hold, such as fluensulfone, fluopyram, and fluazindolizine, which offer a safer toxicity profile and different modes of action.
Environmental Concern
As we’ve noted, consumers and regulators have made themselves very clear: they demand chemicals that are gentler on the environment. Sustainability is one of the primary goals and potential benefits of specialty chemicals, whether it means less energy consumed or waste generated, cleaner air in the home or in the community, or faster biodegradation. They may even offer the prevention pollution benefits of “green chemistry” in the development stages.
The green chemicals market is projected to grow at nearly 10% between 2024 and 2032. Chemical company valuations are following the trend, as well, with sellers of products like bio-based consumer items earning on average higher enterprise-value-to-revenue valuations.
Advances in Technology
The pace at which new specialty chemicals are emerging is due in large part to new techniques making it possible. Machine learning, AI, predictive analytics…advances in process engineering, materials science, synthetic chemistry…it’s all serving to open up new possibilities in the form of complex molecules and polymers with better performance and improved functionality.
As just one example, nanotechnology has found its way into new specialty chemicals for a broad range of sectors: functional coatings (coatings with novel functions beyond traditional protection and decoration qualities) for the construction and automotive industries, biomedicines, metal-free semiconductors, nanopropellants for the aerospace industry, and more.
The Need for Premium Performance
While there are still uses for the axle greases and bleaches of the world that are jacks of all trades, niche specialty chemicals with specific uses in demanding applications are needed in countless aspects of modern life. Contractors want concrete that’s stronger and resists water better. Automakers need fire-, cold-, and abrasion-resistant fabric for airbags to make cars safer. Farmers need pesticides that keep them in good standing with the EPA, while also working against increasingly pesticide-resistant insects and rodents.
In sectors where sustainable or eco-friendly products are still relatively new, the development of specialty chemicals is now focused on performance, where before consumers were sometimes forced to sacrifice performance for sustainability. For example, low-VOC paints have struggled with blocking and hardness development in the past and paint makers are experimenting with different coalescents and additives to improve “green” paint performance.
Urbanization, Industrialization & Population Growth
Another factor driving specialty chemical development is the sheer demand for the products they feature in, especially construction products. This is the result of continued growth in world population and increased urbanization, particularly in emerging markets, which spurs demand for adhesives, coatings, concrete admixtures, and other chemicals used in building infrastructure. This population growth also increases the need to maximize space by building higher, more complex structures that depend on specialty chemicals for their improved performance capabilities.
By the same token, available agricultural land diminishes, necessitating methods to maximize crop yields per acre…and so specialty agrochemicals gain new importance.
And more people means more drivers, so more automotive chemicals, a major segment of the specialty chemical industry; and more shoppers, boosting demand for specialty chemicals for electronics, such as those used in cleaning semiconductors in the manufacturing process.
Seatex Can Help You Stay Ahead of the Curve
The opportunities abound for exploiting the growth of specialty chemicals, if you know where to look. Seatex can help you develop a new specialty chemical concept and carry it all the way through commercialization.
